Mr. Speaker, I move—

Section 55 of our present Constitution and its predecessor, the old South Africa Act, 1909, has often been the subject of widely divergent opinions concerning the disqualification for membership of the Senate or Parliament. As a result of this a Select Committee was appointed during the first session of Parliament last year with the following terms of reference—

1. (a) the necessity and desirability of the retention of the provisions of the said section 55(d);
2. (b) the form that such provisions should take; and
3. (c) the application thereof,

Owing to the limited time it had at its disposal, that Select Committee was unfortunately unable to complete its work. At the beginning of the present session a Select Committee, under chairmanship of the hon. member for Mossel Bay, was once again appointed with the same terms of reference as the previous Select Committee. I must emphasize that the task entrusted to the Select Committee was not an easy one, owing to various factors. In the first place there was the time factor that had constantly to be borne in mind, since the interim measure placed on the Statute Book last year, viz. the Offices of Profit under the Republic Amendment Bill, 1978 (Act No. 54 of 1978), afforded protection only up to 31 May 1979 to those senators and members of Parliament disqualified from being able to take their places as Senators or members of Parliament owing to the provisions of section 55, immediately prior to the enactment of that Act. A second factor that hampered the Select Committee’s task was the fact that they had to take decisions that would necessarily have far-reaching implications for serving Senators and members of Parliament, because the measure they had to investigate dealt with the disqualifications for membership of the Senate or Parliament.

I want to express my appreciation to the members of that Select Committee today, not only for the seriousness and dedication with which they performed their task, but also for the fearless objectivity they displayed. I also want to express my gratitude and appreciation to the hon. member for Mossel Bay under whose competent leadership the Select Committee functioned.

Because I am coming to this House today with a Bill which differs from the Bill proposed by the Select Committee, I want to give the assurance that the Select Committee’s work has not been in vain. Owing to a shortage of time the committee’s decisions and recommendations can neither be studied nor put into operation at this stage. The Joint Select Committee on the Constitution which is investigating a new constitution for the Republic, will indeed, however, take thorough cognizance of the Select Committee’s decisions and recommendations. The Bill serving before the House at present must consequently be regarded as merely another interim measure, since time has unfortunately caught up with us.

In terms of section 55(d) as it stands at present, the person who occupies an office of profit under the Republic is disqualified from being elected or nominated or sitting as a member of the Senate or the House of Assembly. However, a proviso has been added to section 55(d) in terms of which certain persons are not deemed to be occupying offices of profit under the Republic. However, in view of the wording of section 55(d) doubt exists as to whether a member of a commission of inquiry, appointed by the State President or the administrator of the province, falls under this qualification too. For that reason clause 1 of this Bill proposes that members of such commissions of inquiry should be named expressly under the qualification as well. It was also thought advisable to include members of Select Committees of the Senate and Parliament in the proviso in order to eliminate any uncertainty with regard to the members of Select Committees that may sit as commissions during a recess.

Mr. Speaker, the Offices of Profit under the Republic Amendment Act, 1978, was merely an interim measure and lost its protective effect on 31 May 1979. This means that serving members of the Senate or Parliament or of a provincial council to whom that act relates, no longer enjoy protection after 31 May 1979. Clause 2 is phrased in such a way that a moratorium of 30 days is afforded those members to get rid of any disqualification that may still be attached to them in terms of section 55(d). The onus rests on the members themselves to determine whether the provisions of section 55(d) are still applicable to them after 30 June 1979.

The position of members of the various control boards instituted in terms of the provisions of the Marketing Act, 1968 (Act 59 of 1968), and members of the Board of Curators for National Parks, appointed in terms of the National Parks Act, 1976, was discussed in depth with the Chief State Law Adviser, and I want to state here emphatically that members of such control boards, for example the Oil Seed Control Board, the Milk Board, the Wool Board, the Maize Board, etc., as well as members of the Board of Curators for National Parks, are employed by the board in question and are not in the employ of the Republic. Consequently they are not occupying offices of profit under the Republic. Consequently the provisions of section 55(d) of the Constitution are not applicable to them.

Mr. Speaker, with the permission of the hon. the Minister of Finance, I should also like to announce that he has decided to increase the daily allowance of R15 per day payable in terms of Government Notice No. 2192 of 23 November 1973 to a member of a council, committee or similar body appointed by or in terms of an Act as intended in section 55(d)(vi), to R30 per day because, as we all know, there have been considerable increases in costs since November 1973. This increase will presently be announced in the Gazette.

Mr. Speaker, the PFP will not oppose the Second Reading of this Bill and will allow it an untrammelled passage through all its stages in this House. This does not, however, mean that there are not aspects of the legislation which should be properly ventilated. On the contrary, the Bill before the House is the result of a series of legal events stretching over several years. The current section 55 of the Constitution Act, and its counterpart in the pre-1961 Constitution Act, has provided the legal fraternity, as we all know, with many interesting and not so academic conundrums. It has been a most litigious provision. It has had its most recent court hearing in 1978 in the case of Theron v. Hylton-Smith, in which the respondent was unseated after it was found that he was not qualified to be elected to the provincial council by virtue of the fact that he held, inter alia, the position of chairman of the Natal Board for Development and Services, which position the court held and deemed to be an office of profit. The immediate consequence of this decision was that several elected Parliamentarians and provincial councillors urgently re-examined their own positions. It became clear, to say the least, that the cases of several were subject to doubt. Accordingly, the hon. the Minister introduced a Bill last year to suspend the provisions of section 55 of the Constitution Act for sitting members until 30 May 1979. The passage of that Bill reinstated Mr. Hylton-Smith and removed temporarily the sword of Damocles from over the heads of those members who were in doubt.

Last year’s enactment, however, was never intended to be more than a temporary measure, for the real difficulty lay in the wording of section 55 of the Constitution Act and the lack of clarity it engenders. The more permanent answer seemed to lie in a clarification of the whole concept of an office of profit. The hon. the Minister recognized this fact and early this year a Select Committee under the chairmanship of the hon. member for Mossel Bay was appointed to go into the necessity and desirability of the retention of the provisions of the offending section, the form they should take and the application thereof. The committee was given power, if it felt it necessary to bring up a Bill.

I and 14 other hon. members of this House served on that Select Committee. At this stage, I would like to say that it was a pleasure and a privilege to work with my hon. colleagues under the chairmanship of the hon. member for Mossel Bay on this occasion, and the force of reason and objectivity of all the hon. members in relation to the matter before us enabled the chairman of the Select Committee to produce a report which had the unanimous support of all the participants. I believe that some aspects of the report require highlighting and mention because they bear direct relevance to the legislation before us. I should like to quote a few of the paragraphs in the Select Committee’s report. The very first states—

Paragraph 3 states—

Paragraph 4 states—

Paragraph 6 states—

In paragraph 9 the committee states—

Simultaneously with the report, the committee delivered up an amending Bill which I mention at this stage and which is purportedly on the Order Paper, although it differs, I may say, in some respect from the Bill which the committee delivered up, and I think that should be a matter of separate debate, but it delivered up an amending Bill which in some form has been put on the Order Paper, if not precisely in the form in which the committee drafted it, and covering all the aspects decided upon by the Committee, some of which I have quoted. Imagine our surprise therefore when during the course of our deliberations we were presented with the Bill which is presently under discussion, the Bill which has been proposed by the hon. the Minister, which virtually pre-empts and ignores the most valuable work done by the committee. Except for commissions of inquiry none of the decisions of the Select Committee are taken cognizance of. In particular the fuzzy and litigious section 55(d) is left unaltered with all its uncertain consequences. No attempt whatsoever is made in the Bill to define more precisely what exactly is meant by the term “office of profit”. All that this Bill does is to give Senators, members of Parliament and provincial councillors until 30 June 1979 to regulate their positions, without enlightening them at all as to where the lines are drawn or where the dangers lie. Furthermore, the question of or the distinction between members appointed or, on the other side, elected in the normal course of events, is not dealt with at all in relation to any of the bodies which might be offending bodies. As one of my colleagues on the Select Committee put it, and I should like to quote him—

The Select Committee felt, also unanimously, that the question of financial remuneration was not the only criterion to be weighed in considering what should be deemed to be an office of profit. We felt that the question of influence which the holding of an office brings, was also an important factor. I want to quote from representations one of my colleagues has made to the Select Committee. He said as follows—

These and several other factors have been bypassed by the Bill before us. I concede to the hon. the Minister that the time factor made it very difficult for him to produce the legislation we should like to see, but in the circumstances—even this morning the hon. the Minister of Economic Affairs introduced a Bill—I honestly believe that this is no excuse at all. Except for commissions of inquiry this Bill solves nothing and merely heralds a return to the pre-Hylton-Smith era.

The PFP believe that our country’s constitution should not be lightly changed. It is the basic and founding document of our system of Government, upon which our very system is based. Therefore, when amendments and adaptations do become necessary, I believe they should only be introduced after careful study and after a great amount of research has been invested in the matter.

The measure before us is a half-baked measure and solves little. I want to give another example. In this regard I want to paraphrase an official document which has been before the committee. At present a member of Parliament who in good faith accepts a post and is subsequently taken to court because that post is held to be an office of profit, must vacate his seat under section 56 of the Constitution even if he has since ceased to hold the post in question or even if he relinquishes the post when his attention is being drawn to the possibility that the position in question is an office of profit. In addition, the member is under section 57 liable to a penalty of R200 for each day on which he sat or voted as a member of Parliament while knowing that he was incapable of sitting or voting or having reasonable grounds for knowing that he was so incapable. As it is a matter of opinion as to what constitutes reasonable grounds, a court could in fact find and hold that a member had such grounds for knowing even if that member might bona fide have believed that the post in question was not an office of profit. As he could have held the post for a period of years without any objection having been made at all prior to the court hearing, the penalty to which he could be liable, apart from losing his seat, could run to a considerable sum. In fact, in order to avoid these drastic consequences and severe penalties, Parliament has had to amend our Constitution with retrospective effect on no less than six occasions, namely in 1933, 1940, 1943, 1969, 1972 and 1978. It must be pointed out to all hon. members of this House, to Senators and provincial councillors that the effect of the amendment before us today sends us back in time to the position that pertained in November 1977, when Mr. Hylton-Smith was first elected. Let such members beware. It is a great pity when a Bill which I believe solves most of the difficulties I have enumerated so far in what I had to say, has in fact been delivered by the Select Committee and is available at this very moment for this House to pass, has been left aside. It may be a wise thing to refer it to the Joint Select Committee on the Constitution for further consideration, but that would delay by a year or more clearing up the vagaries of the present law.

Another gap in the Constitution is to be found in the fact that while elected members are prevented from holding what is vaguely defined as being an “office of profit”, section 22 of the Constitution places no such corresponding restriction on the executive authority. While members are therefore precluded from accepting office, the executive is not precluded from appointing or enticing members to accept such office. This aspect, which too is ignored by the present Bill before us, is also fully dealt with in the Bill which has been delivered up by the Select Committee.

I believe that it is very sad that the Government should be prepared to present so shoddy an amending Bill providing as it does no more than a patchwork and inadequate remedies to the realities of the situation, particularly as there is something much better before us already.

While we in the PFP find nothing that is offensive in the Bill before us, but incorporating its provisions into our Constitution is, I believe, like lighting a candle on a moonless night in a dark open field when massive electric floodlighting is available and awaits only the turning on of a switch.

Mr. Speaker, as is apparent from the speech of the hon. the Minister and that of the hon. member for Sandton, the measure before this House this morning is an extremely technical one. Reference has been made to the fact that this matter was referred to a Select Committee and that the Select Committee gave its attention to this thorny matter over two Parliamentary sessions and eventually came forward with a report and also with an amended draft section.

However it is true that the recommendations of the Select Committee was made known only fairly recently. This placed the hon. the Minister in the unenviable position of evaluating the recommendations of the committee and then of converting them into legislation within a short space of time. Meanwhile, however, time was rapidly running out and consequently the hon. the Minister was compelled to come forward with an interim measure, the interim measure in the form of the Bill before us.

Before I proceed, I want to say that for me as a reasonably junior member of this House it was an exceptional privilege to be able to serve as chairman of this Select Committee, and I want to express my sincere thanks and appreciation to the members of the Select Committee for their co-operation. I include all those hon. members of this House who served as members of that committee. I thank them for the way in which they tolerated me as chairman and for the way in which they co-operated, in a spirit of objectivity and harmony, in creating a measure to eliminate the uncertainty existing in terms of section 55(d). I can testify that the members of the committee were objective at all times, that there was no trace of petty politicking and that we co-operated wholeheartedly.

That is why I really find it rather a pity that the hon. member for Sandton judged the measure at present before this House rather sharply. In a way I can understand his disappointment that the Select Committee’s recommendations are not before this House at present. As chairman of the Select Committee I would certainly not be speaking the truth if I were to say that I am not also sorry that things developed in such a way that the Select Committee’s recommendations could not enjoy the attention of this House today. However, one must be realistic at all times and must accept the facts of the situation.

Under these circumstances I believe that what the hon. the Minister envisages with the measure at present before this House is to provide for the situation that has arisen since the previous temporary measure became void on 31 May this year. By means of the measure before this House at present, the hon. the Minister is proposing to bridge the time until attention can be given to the matter on a permanent basis.

I believe that when the Select Committee dealing with the proposed Constitution, or any other body that this measure may be entrusted with at a later stage, approaches this matter, the necessary attention will be given to the Select Committee’s recommendations. Because, in my opinion, there is merit in the Select Committee’s recommendations, I believe that the recommendations will be accepted and will eventually come before this House in the form of legislation.

Finally, let me once again convey my sincere gratitude for co-operation. I do not want to judge too harshly the remarks made by the hon. member for Sandton this morning, because I believe that he is most probably just a little more disappointed than some of the other members of the Committee and consequently found it necessary to express himself more sharply than the circumstances really warranted.

Mr. Speaker, I want to associate myself with the hon. member for Mossel Bay and congratulate and thank him for the way in which he led the Select Committee over a long period. We really had a great many meetings. Under his leadership we had every opportunity to reflect on the ideas and concepts involved in this matter. If one takes a look at the Bill, apart from the slight amendment which is contained in it, and reads the report, one realizes that the Select Committee has taken wise decisions. I must also congratulate the hon. member on the diplomatic way in which he reacted to the fact that the hon. the Minister, under the pressure of his work, did not have time to study the legislation which the Select Committee submitted in detail so that he could accept it. The legislation submitted by the Select Committee, was supported unanimously by the members of the committee.

†It is indeed a difficult situation in which we find ourselves. It is extremely disappointing to the members of a Select Committee which spent many hours analysing a very difficult concept and a very difficult situation that has arisen over a long time. Therefore, I must say quite frankly that, whilst we appreciate the difficulties of the hon. the Minister, this is something against which we as members of the House must to a certain extent protest.

The problems created by the concept of offices of profit have come a long way in South Africa. The Bill the hon. the Minister has introduced does incorporate a small fraction of our recommendations, but for the rest it still leaves the whole uncertainty concerning the concept of offices of profit completely untouched. One may say that a new constitution is going to be drawn up for the country, but that constitution may or may not come within a year; we just do not know. What we members of the Select Committee are concerned about is whether in that new constitution the principles on which we have decided in the Select Committee will in fact be incorporated. For that reason we must use this opportunity to try to convince the hon. the Minister of the need for that. I do not think it is just a matter of his not having enough time available; I think it is also necessary for us to try to convince the hon. the Minister that he should see to it that the principles on which the Select Committee unanimously decided should in fact be incorporated in the new constitution.

My reason for saying this is that, having listened very carefully to what the hon. the Minister had to say in introducing this Bill, I noted that he pointed out that legal advisers have said that, as regards people serving on statutory boards, those are not considered as offices of profit, but quite legitimate appointments and that the amounts involved in that regard are not at issue. Let me say that, quite frankly, that point is contrary to the findings on which there was consensus in the Select Committee.

The Select Committee, in its report, makes it quite clear that what should be prevented is undue influencing of the Legislature by the Executive Government, or vice versa. The situation could, however, arise that the Executive could place people in a position of patronage. We have had available to us legal opinion in which it is stated clearly that, in determining what is an office of profit, the aspect of remuneration is really not the major factor. The point really is who makes the appointment. That is the major factor in determining whether an appointment is, as it were, a gift from the Republic.

When one views it from that point of view, one finds that, whilst perhaps as the Act stands today the legal advisers are correct in saying that these positions should not be regarded as offices of profit, it is still to a certain extent contrary to the whole concept of the separation of power between the Legislature and the Executive. In evidence given to the Select Committee by a well-known advocate, he says with regard to the position of a chairman of a board—

So he carries on. Let me quote another example—

Then one must further read it mutatis mutandis in terms of certain sections of the Republic of South Africa Constitution Act. The office can also relate to an appointment by an Administrator or a member of an executive committee. No wonder there was, in the Select Committee, a unanimous feeling that the existing section 55(d) is not restrictive enough and does not go far enough as regards disqualification. For that reason, as the hon. the Minister can see, in our recommendation we try to get away from the concept “office of profit”, saying that the test should be who makes the appointment, and that if the appointment were made by the Minister, by the State or by the State President, that could be regarded as giving rise to undue influence.

In our recommendations we also mentioned, not only the fact of an appointment being made, but also the fact of an assignment being given. All these aspects were put forward, not only to be restrictive, but also to make the situation very easy to interpret. The hon. the Minister, however, is allowing the present situation to continue for another year, but the period, of course, need not be one year. The period could, in fact, be much longer. Before the new Constitution comes into affect, we may even find ourselves faced with a general election, and in that case we would have to face that general election, not with the provisions of a new Constitution, but with a section 55(d) which has been proved, throughout the years, to have been inadequate and not specific and which have given rise to litigation. It has, in fact, proven to be an open invitation to litigation. I therefore believe that this is a thoroughly bad way of trying to get out of the dilemma in which we have found ourselves, and this is something I think we must tell the hon. the Minister. If I can convince the hon. the Minister of only one thing, I hope it will be that the very principles we have fought for are the principles that should be incorporated as soon as possible.

I just want to deal with one other matter involving the difficulties we have always had with this. I am referring to section 55(d)(vi). The hon. the Minister has announced an increase of R30, but the actual amount is not, in itself, the problem. There are other difficulties that have been created, because as the Act has read in the past—and it will continue to read that way—a person is incapable of being elected in terms of the provisions of section 55(d). Particularly section 55(d)(6) has proved in the past that people are placed in an invidious position when making themselves available as candidates for Parliament. Even if they could win the election, even if they resign and give the money back or have letters to prove that the persons who appointed them have waived the appointment, the persons concerned will still be incapable of standing as candidates. It is with such difficulties in view that we have perhaps to face another general election. I just want to put one question to the hon. the Minister about this. This is something we worried about a great deal and argued about extensively, and this is why we considered it to be so important to forget about the concept of “office of profit” and to introduce a simple principle about who makes the appointment or who gives the assignment.

Let us consider the position of a district surgeon. A member of Parliament or a provincial councillor may accept, for one week, an assignment as a temporary district surgeon. Can he do so, in terms of the present Act? Also, if he can do so, do we believe that it is correct for him to do so? On the other hand there could be someone who may want to stand as a candidate for the provincial council or for Parliament, but who knows that his chances of winning the seat for his party are hopeless. If such a person happens to be a district surgeon, do we honestly believe that he should resign before even being allowed to stand as a candidate? If that is the interpretation, is it something we want to encourage?

I do not want to take up the time of the House unduly. All I want to do now is to try to get the hon. the Minister to understand the seriousness of the situation. I want him to realize that this is to us a great disappointment, not because we happen to have been members of that Select Committee or because we were expecting him to come forward with wonderful ideas. As a matter of fact, I think we can even easily criticize our own findings. Nevertheless, I firmly believe we have put forward—incorporated in our proposed plans—certain principles which could be of invaluable assistance in clearing up the situation regarding this particular clause. As the clause is worded now it extends an open invitation for litigation. This is the one thing against which we should guard.

In conclusion I should like to point out to the hon. the Minister that we have put an amendment on the Order Paper asking for a committee of inquiry to be set up. This can, I believe, only help to clear up and to regulate some of the problems that we are encountering in this respect. I am not even sure whether there are any hon. members serving on the commission of inquiry into the proposed new constitutional dispensation who also served as members of this particular Select Committee. I sincerely hope that is the case.

Do not worry. I will be there.

The hon. member for Sandton tells me not to worry. Apparently he is one such hon. member. The hon. member should then realize that a tremendous responsibility rests on his shoulders. I now know who can be kept responsible should the draft Constitution Bill contain the same shortcomings and deficiencies that exist in the Bill with which we are dealing now.

We obviously have to support the Second Reading of this Bill. However, we also have to use this opportunity of trying to impress upon the hon. the Minister the seriousness of the situation. I appeal to him to try to understand our difficulties in this respect.

Mr. Speaker, I too want to thank the hon. member for Mossel Bay for the competent way in which he led the Select Committee. Furthermore, I also want to express my thanks to hon. members of the Opposition who really got to grips with the problem and often came forward with positive ideas too. At this stage I also want to express my sincere thanks to the hon. the Minister, who sat listening so patiently to hon. members of the Opposition, while some of them have clearly adopted the premise during the debate so far that the hon. the Minister did not know what was at issue. Surely it is absolute nonsense to adopt the premise that the hon. the Minister does not understand the problem. It is for the very reason that he understands the problem so well that he appointed two commissions of inquiry. Surely there is a problem. I believe, too, that hon. members will find that the hon. the Minister is perhaps more aware of these problems than hon. members of the Opposition could ever dream of being.

The problem was summarized very well and clearly—and I also want to state this as a premise—in the finding by the learned judge Mr. Justice Diemont, in the case of Wilkenson v. Loubser, in 1954. He said, inter alia—

That was the situation prevailing at that stage. The learned judge stated the matter very clearly and I cannot improve on it. However, it is also true that we can all identify the problem, and can raise a fuss about it. It is one thing to unravel the problem. However, it is a different matter altogether to draft a meaningful piece of legislation from those unravelled arguments.

We have had this situation since 1909. Section 53 of the South Africa Act, 1909, was the beginning of the problem. We are still saddled with that problem today. If we examine paragraph 7 of the report of the Select Committee, it states there very clearly what the problem really is. The committee considered various methods by which to give effect to its opinion. One of these was a clear definition of what is meant by the expression “office of profit under the Republic”. In the second place, the committee considered compiling a complete list of posts of which the occupiers would be disqualified from election as a member of the Senate and the House of Assembly. This is in actual fact based on the British model. The British model adopts the premise that there should be absolute certainty as to the legal position. But at the same time the disadvantage of this is that it is in actual fact very clumsy.

Thus the Select Committee considered all aspects. Various submissions were received from professors, bodies and persons and these were given due consideration. I want to say clearly that while all pointed out the problems, none could really furnish guidance enabling us to know where we stood. There is a school of thought that believes that members of Parliament should not occupy any other positions at all under any circumstances whatsoever. In my opinion this would lead to the emasculation of many of the committees on which members of Parliament ought to serve owing to their special abilities and qualifications in respect of specific matters. The problem in fact lies in striking a balance. The legislation in its present form is not so terribly unsatisfactory as hon. members opposite want to make out, because a body of legal precedents has been built up around this position over a number of years.

Because this is the case, I cannot understand why the hon. the Minister is being reproached for inserting an additional clause and for the rest, retaining everything that is already there. As I have said, there is a body of precedents that states the matter reasonably clearly. The addition of subparagraph (vii) represents an improvement of the matter. Consequently I cannot understand why hon. members are making such a fuss.

The Select Committee did fine work and also came forward with new ideas that first have to be studied properly before they can be converted into legislation. Surely in the nature of the matter this is logical. Surely the Select Committee cannot make a submission that is converted into legislation almost immediately before first being widely distributed and studied. It would seem to me as if the Opposition do not want to perceive this. Therefore, this is the situation we have now reached.

The legislation now before this House clearly represents an improvement on the existing position. To tell the truth, the hon. the Minister went so far as to submit this Bill to the Select Committee for perusal. If I remember correctly, there was no objection or opposition to this submission of the hon. the Minister. I want to thank the hon. the Minister for his reasonable conduct in consulting the Select Committee in this regard. I think the time has come for the hon. Opposition to say this too, because this legislation is not something that is being steam-rollered through Parliament. This is something about which the Select Committee was consulted.

In addition it is true that we cannot allow a lacuna to remain in the legislation forever. It is true that from 1 June this year there has been a lacuna in the legislation because the previous legislation lapsed on 31 May this year. It is an indisputable fact that something will have to be done. The hon. the Minister cannot do nothing. But what is the hon. the Minister to do? Is it possible for the hon. the Minister to convert the Select Committee’s recommendations into legislation at once? I do not think this is possible. That road is closed for the hon. the Minister. What is he to do now? He has proposed an improvement and everyone agrees with it. And yet the hon. the Minister is apparently being reproached for doing this very thing! We on this side of the House understand very clearly why the legislation proposed by the Select Committee cannot take effect at once. A Joint Select Committee is examining our whole constitutional dispensation and we understand that that committee must follow up the proposals of the Select Committee on Offices of Profit. To us this is logical and indicates that one must not be overhasty when dealing with the question of offices of profit, because offices of profit touch the essence of our democratic system. If a member of this House occupies an office of profit under the State, he could become a lackey of the executive and might be unable to fulfil his function as a legislator properly. When we understand this, we realize how carefully one must act when implementing new legislation. I have no reason to doubt that the hon. the Minister feels this democratic instinct strongly. The appointment of Select Committees on this matter furnishes evidence of this. Consequently I, as a member of that Select Committee, have not the slightest doubt in my mind and I am completely satisfied that the legislation as it is before us now, is the best we can do at present. It ought to be passed. I support it 100%.

Mr. Speaker, I do not intend to take up too much of the time of this House. I just want to mention a few points of importance. The first, and perhaps the only repetition you will hear from me, is that I, too, want to thank the hon. member for Mossel Bay, the chairman of the Select Committee, for his conduct as chairman, for his patience and for the contribution he himself made to the Select Committee’s work. We are very grateful for that. Nevertheless I am somewhat surprised that this hon. member, who I know has very strong convictions, was prepared to speak today with so little conviction about the specific legislation we are discussing today.

As far as the hon. member for Pretoria West is concerned, I just want to point out that in general, we achieved consensus in the Select Committee. What that consensus related to has already been explained to this House. Fundamentally it was the aim of everyone in that Select Committee, of all the parties without exception to eliminate certain weaknesses in the existing legislation and to ensure that the principle of the non-influencing of members of this House should be maintained and strengthened. It is a great disappointment to us that that principle, generally accepted by all the members of the Select Committee, is not embodied in the legislation before this House today. The legislation before this House today constitutes a circumvention of our efforts to settle the matter, to state the matter forcefully and to amend the legislation in such a way that uncertainties contained in it can be eliminated. I feel it weakens the status of Select Committees in general when we find that where a Select Committee is appointed and recommends that certain amendments to the legislation are necessary, the hon. the Minister nevertheless comes to this House without submitting those amendments. This means that a Minister can ignore the recommendations of a Select Committee that has done thorough work and has achieved general consensus, and can come to this House with his own legislation. I think this weakens the status and principle of Select Committees.

†I believe the hon. the Minister did have other alternatives, and I want to say this to the hon. member for Pretoria East as well. The hon. the Minister has now come forward with a piece of amending legislation which he says is temporary. As regards the Bill proposed by the Select Committee, he says it can go to the Joint Committee on the Constitution for further consideration. This being so and since the Committee on the Constitution is in any event going to look at legislation relating to section 55 of the Constitution, why was it not possible for the Bill proposed by the Select Committee to be introduced this session and to be accepted by this House, both with the improvements and clarifications which it would have brought about and with the saving clause in respect of members whose position was in jeopardy and then have it reviewed by the Committee on the Constitution? Having done its good work and having clarified the situation in the meantime, it is as subject to review by that committee as any other part of the Constitution will presumably be subject to review by that committee. Why was that course not taken? I believe the present approach to this matter is wrong. I think the hon. the Minister’s remarks, particularly in his introductory speech, should be looked at very closely. He has said the following (Hansard, 18 June 1979)—

*This is surprising. I quote from paragraph 8 of the report of the Select Committee on Offices of Profit—

That is true. We decided that it was not only the remuneration that was of importance, but the appointment too. The hon. the Minister will agree with me in principle that this must be the case, because we want to prevent members of this House from being influenced by the executive. Surely this is the fundamental principle embodied in section 55. The hon. the Minister, an honest man, really must not come along and say that appointments to the Dairy Board, the Wool Board and the Maize Board, etc., are not influenced or done by Ministers. They are done by the executive or on its recommendation or by its influence. If this is not the case, why then are so many members of Parliament appointed?

I think it should be said that this Bill is, in our opinion, an extremely disappointing one. We had expected something better. The reason why we are in fact going to support this Bill is simply that it affects the position of certain members whose status in this House is uncertain for the very reason of the uncertainties in the Act, owing to the unsatisfactory situation existing under section 55, a situation that is now being perpetuated by the hon. the Minister. We must assist those people, because they have been placed in this situation due to uncertainties in the Act, uncertainties that we in the Select Committee have tried to rectify. But those uncertainties are now being perpetuated here and those hon. members are still in danger. Only because this is the case and because we feel that those members are being done an injustice by the perpetuation of those uncertainties, we are compelled to secure their position. Such a safeguard is in fact embodied in this Bill. It would also have been embodied in the Bill proposed by the Select Committee, but since the Select Committee’s Bill is not being submitted to this House and we are discussing the Bill introduced here by the hon. the Minister, in which this safeguard in respect of certain members is in fact being given, we support the Bill.

Mr. Speaker, if we all proceed to express our disappointment to the extent that hon. members have done this morning, we are soon all going to be in tears! To me, too, it was a privilege to be able to be a member of this Select Committee. I was impressed by the way in which the hon. member for Mossel Bay acted as chairman. Reference has been made here today to his diplomacy. I think that as far as that is concerned, he excelled himself today. In this respect he was brilliant on the Select Committee too.

I just want to refer briefly to a few aspects. This is more than a reaction to the debate so far. In his Second Reading speech the hon. the Minister referred to the fact that the report of the Select Committee would be submitted to the committee on a new constitution. I should just like to suggest for the hon. the Minister’s consideration the possibility that the Select Committee’s Bill nevertheless be considered for introduction in the next session. I say this because it will certainly afford considerably more clarity. By-elections and even perhaps a general election could still take place before the new constitution comes into effect. Then again, fresh matters could come to the fore that could cause various people inconvenience and concern.

There are a few other aspects too. The hon. the Minister said very clearly that according to legal advice, members of marketing boards and members of the Board of Curators for National Parks are not considered to be occupying offices of profit under the State. The hon. member for Durban Central referred to a legal opinion by a senior advocate which could point to the contrary being true. Then one should also point out that problems could arise in this whole process. If one analyses the recommendations, the Select Committee was unanimous that members of marketing boards and the Boards of Curators for National Parks ought not to be excluded from section 55(d). Consequently those posts disqualify these people. I think this is something which requires the attention of the hon. the Minister in the near future.

The hon. members for Constantia, Sandton and Durban Central referred to possible improper influencing of members. I want to agree with that purely from a constitutional point of view. It is also correct that justice should not only be done, but that it should also, indeed, be seen to be done. However, to place such emphasis on this is not in accordance with the present practice where we have a party system with a caucus system. Even though someone is the chairman of some board or other, he will vote as his caucus decides and he has to vote or he will have to leave the party. Consequently I think that the real danger of influencing within the framework of the party and caucus system is something to which one need not pay too much attention. However, when one deals with constitutional matters, one concedes that one also has to ensure that these are in accordance with what is being envisaged with regard to the constitution.

Sharp attacks have been made on the fact that this is a half-baked measure. The hon. the Minister intimated very clearly that this was an interim measure. As a result of this I consequently took the liberty of making the appeal that the report of the Select Committee should indeed receive attention in the next session of this House. I think that we should see it in that light. We cannot speak of a separation of powers as being an absolute separation. This does not exist in terms of the system. Nor did it exist in the British system. On the other hand, one cannot speak of an absolutely mixed system either. I think the premise we should accept is that we have partial separation, while adopting as a premise the irreconcilability of certain offices with the office of member of Parliament, Senator or member of the provincial council.

To conclude: The proposals embodied in the measure before the House are in accordance with a portion of the recommendation of the Select Committee, and in that respect I can support it without hesitation.

Mr. Speaker, I want to thank all of the six hon. members who spoke, very sincerely for their contribution. I want to express my appreciation at once to the hon. members on the Opposition side for their support of this measure. I have been in politics long enough to know that they are not protesting too much. I appreciate their attitude in this regard.

The Select Committee’s report was signed on 5 June 1979 and I understand that it was distributed only last Friday. This left my department and the Government very little time to consider the implications of the recommendations and the proposed legislation of the Select Committee. The legislation submitted by the Select Committee is not under discussion now, nor are their proposals. For that reason I do not want to discuss them now. However, I can give hon. members the assurance that from the point of view of the Government and its advisers, the proposals of the Select Committee definitely entail certain implications and complications, but in the time at my disposal it is impossible for me to consider those implications and complications sufficiently thoroughly to enable me to adopt a standpoint on them on behalf of the Government. It is for that reason only that I introduced the interim measure.

I have already given hon. members the assurance that the Joint Select Committee in question, of which I am the chairman, will examine the proposals of the Select Committee thoroughly. I believe that it is, after all, very clear to all of us that the members that we have to protect and to whom we have promised protection—there are also Opposition members among them—must enjoy continued protection.

I want to refer to a legal opinion from which the hon. member for Durban Central quoted. This legal opinion is very familiar to me, but, with all due respect, it does not take two well-known findings into account, viz. the findings in the so-called Havenga and Krige cases. I must say with all due respect that my department and I consequently do not attach the measure of importance to that opinion that the hon. member does.

This is all I want to say at this stage, except to point out to the hon. member for Durban Central that I am prepared to accept in the Committee Stage his amendment as printed on the Order Paper.

Question agreed to.

Bill read a Second Time.

Committee Stage

Clause 1:

Mr. Chairman, since the hon. the Minister has already indicated during the Second Reading debate that he will accept it, I rise merely to move the amendment printed in my name on the Order Paper, as follows—

Mr. Chairman, I accept the amendment.

Amendment agreed to.

Clause, as amended, agreed to.

House Resumed:

Bill reported with an amendment.

Bill read a Third Time.

Mr. Chairman, I should just like to inquire from the hon. the Minister what the purpose is of the 14% which is included. It struck me as being a little strange that we should be dealing with 15½% and 20½%. Is there some particular merit in that? Is it felt that the extra 14% will make some difference to the securities which have to be held, or is it accidental? I must say that it does seem strange to me.

Mr. Chairman, there is nothing particularly sinister or mysterious about it. That is just how the proportion was worked out by the office of the Registrar of Financial Institutions. I saw an article not long ago pointing out how people these days tend to talk more in terms of multiples of five than anything else. It is a strange thing. Two and a half is a half of five; I think it is as good as 15 or 16. In any event, there is nothing sinister about it.

Mr. Chairman, I am pleased that there is nothing sinister about it, but I should like to recommend to the hon. the Minister that when this measure is reviewed at some stage in the future we might look at this again, because in the circumstances it seems unnecessary. I shall not, however, pursue the matter further now.

Clause agreed to.

Clause 9:

Mr. Chairman, the first duty I have, and which I gladly perform, is to thank the hon. the Minister for his most reasonable response to the representations I made during the Second Reading debate of this Bill. Secondly, I should like to thank the responsible official, Mr. Le Roux, for making his time and very excellent expertise available to me in trying to find some of the answers to the points I raised. This was greatly appreciated and I should like the gentleman concerned to know that.

Accordingly, I will not move the amendments printed in my name on the Order Paper. Instead, I should like to move as amendments—

1. (1) On page 14, in line 3, to omit all the words after “persons” up to and including “it” in line 12 and to substitute:
   :Provided that the Minister shall not give his consent for such declaration unless—
   1. (a) The registrar has given notice in the Gazette of his intention to make such declaration at least thirty days before such consent is given and has invited in such notice all interested persons to make representations in writing to him within twenty-one days of such notice regarding the intended declaration; and
   2. (b) if such declaration applies to an insurer who is registered under this Act to carry on funeral, industrial, life or sinking fund business or to a person who renders services towards effecting, maintaining or servicing funeral, industrial, life or sinking fund policies underwritten by a registered insurer, the registrar has consulted the advisory committee appointed in terms of section 2A, about it
2. (2) on page 14, in line 27, to omit “twenty-one” and to substitute “sixty”.

The first amendment relates to the principle of the audi alteram partem rule. It lengthens the time span in which the Registrar will arrive at a decision about giving, in the Gazette, the notice specified in the provision, i.e. that a “practice or method of conducting business” is “irregular or undesirable”. Most important, however, is the fact that it creates a situation in which interested parties are given the right and the opportunity to put their side of the case. Some of the cases complained of may involve only one or two specific insurers well-known to the Registrar. Other problems may arise, however, pertaining to a number of companies and brokers or agents who are not well-known to the Registrar and who may not be represented on the advisory committee, and here I refer to brokers in particular. The procedure suggested in terms of the amendment ensures that all parties that may be interested, whether known to the Registrar at the time or not, are given the opportunity of making representations. In the spirit of the manner in which this highly professional department is run, this amendment will, I believe, go a long way towards softening the objection I raised earlier in the debate.

The second amendment is of an elementary nature and is very easily motivated. Once a decision has been taken and gazetted, the insurer or person involved is given 21 days in which to cease such practice or to cease such method of conducting business. If the first amendment is accepted, the one relating to the Registrar hearing representations, the time period of 21 days is, as far as I am concerned, quite acceptable. The insurer has had notice and has also had the opportunity of having his case heard. However, in terms of clause 9(4) he is also given only 21 days in which to rectify anything that is declared to be improper. As I mentioned in the Second Reading debate, it must be borne in mind that a notice given in terms of clause 9 could easily require or precipitate a cancellation of contracts which were already in existence and were then operative. Most insurers have a minimum of 30 days’ notice of cancellation of policy contracts, and in many instances the periods are even longer. Twenty-one days’ notice is, therefore, I believe, too short a time in which to expect an affected company to rectify matters involving contractual liabilities. The amendment I therefore propose lengthens the period of 21 days to a more reasonable period of time for rectification to be made.

Finally I must report that I have been unable to draft an amendment relating to the main aspect of the clause itself, and that is the vagueness of the scope of the prohibition. After having had discussions, I realize that to do so would, in some way, possibly negate the hon. the Minister’s intention in this legislation. I say this because insurance is an innovative business, but I also believe that the perpetrators of malpractices are also innovative in the things they can do. I accept—as I am sure do hon. members in this party—the bona fides of the hon. the Minister and the officials of the department. We know how the hon. the Minister’s department works. We know that decisions are not lightly taken, that people are consulted, that circumstances are weighed up, that objective thinking is brought to bear. We know that, as I see it, the main aims and objectives of this clause are to ensure, firstly, that insurers can meet their obligations to the people who take out insurance, and secondly, that the free market mechanism of uninhibited offer and acceptance is allowed to continue to operate; in other words, that coercive selling, for example, could be curbed. I believe that many people in the industry, and certainly we in these benches, will urge the hon. the Minister and his department to keep a very watchful eye in so far as coercive selling is concerned. Coercive selling of insurance, not by the insurance companies or by brokers, but by other financial institutions using undue influence or inducement of other essential services which they provide, should be watched very carefully. It interferes with the legitimate business of those who are experts in the field, and often prevents customers from obtaining the best and the most suitable insurance packages.

I again thank the hon. the Minister and his officials for their help.

Mr. Chairman, I thank the hon. member for Sandton for his reference to me and to the office of the Registrar, in particular Mr. Le Roux. As the hon. member quite correctly said, this matter has been carefully thrashed out during the rather fruitful discussion at Second Reading. I am quite happy to accept the amendments moved by the hon. member for Sandton. I believe he has explained the reasons behind them quite clearly. I do not believe I can really say anything which can improve on that.

The question of time is always an arbitrary decision in a matter like this, as the hon. member will probably agree. Where we originally talked of 21 days, and he of 19, we are now coming down to 16. That is not exactly splitting the difference, but certainly very near to it. However, it takes it slightly nearer to what the hon. member suggests, and I do not think we should worry about that. I think that I ought not to delay the House any further. Therefore I accept the amendments moved by the hon. member for Sandton.

Mr. Chairman, we are very grateful to the hon. the Minister for accepting the amendments moved by the hon. member for Sandton. However, like Oliver Twist, one sometimes comes for more. It is quite interesting to note that the hon. the Minister has now accepted somewhat more than exists in regard to banking institutions. I should like to suggest to the hon. the Minister that, having accepted that principle of these changes here, banking institutions might also be brought into the same line when banking legislation is reviewed again. I believe this is a precedent that should certainly be welcomed. I should, however, like to see similar principles applied to the banks.

There are two other matters I should like to raise here. I want to apologize to the hon. the Minister for my absence during the Second Reading debate. I believe he knows why I was not here. My voice still gives me away. The first thing I should like to mention, is that I hope that something will be done, in view of the powers that have now been given, to deal with what I regard as a very unsatisfactory situation in connection with rate cutting in the insurance industry at the present moment. I do not want to enlarge on that at very great length. However, if one looks at what has taken place, and is still taking place, in some overseas territories, where this kind of rate cutting in fact gets out of hand, I believe it is not a question of private enterprise giving to the consumer the best article as a result of this. I believe it has certain very serious consequences for the industry as a whole. I would imagine that the office of the Registrar and the office of the hon. the Minister will, having now been given this power, look into this matter and deal with it in an appropriate manner.

The other point I could raise during the Third Reading. However, in order to save time I should like to deal with it briefly at this stage. Having now the power to deal with undesirable practices in banking and in insurance, there is another undesirable practice which, I believe, needs to be drawn to the attention of the hon. the Minister. That is the undesirable practice in regard to the management of share portfolios and investments. There are new businesses that are springing, and that have sprung up from time to time, and people who can least afford it find that their investments are being managed by these mushrooming organizations. If they were merely charging fees for their services, merely taking investors’ fees, and were producing some results in Bull markets, one would not mind, but they actually take the share portfolios of widows and people who can least afford it, allegedly manage them, the businesses go insolvent and the result is that very substantial losses are incurred by people in the community who need protection against this kind of activity. I believe that this falls within the ambit of the hon. the Minister of Finance and that the share management schemes conducted by mushrooming concerns, which spring up from time to time, are undesirable practices. I therefore want to appeal to the hon. the Minister to take some kind of action and, if necessary, to introduce legislation next year to enable him to deal satisfactorily with that situation.

Mr. Chairman, the hon. member for Yeoville has raised three issues. Firstly, he spoke of the possible extension of the sort of procedure regarding undesirable practices, which we are now agreeing to for insurance companies, to banking institutions. That is something we shall certainly look into in the course of the next few months, and perhaps we can talk about this again during the next session of Parliament.

The hon. member’s second point relates to the rate-cutting that is currently taking place in some parts of the insurance industry. I am aware of this, as is the Registrar’s office. It is something that, as I have said, is already receiving the attention of the Registrar. We shall certainly see what can be done about it. I think the hon. member certainly raised a practical issue, though it is an issue we are already aware of.

Thirdly, the hon. member spoke of the question of undesirable practices that might be adopted in the management of share portfolios and investments. The hon. member referred to some mushrooming concerns that set themselves up as authoritative investment analysts and advisers, etc. I take the hon. member’s point and we shall certainly also give our attention to that aspect in the course of the next couple of months. If necessary, we shall be happy to discuss it further with the hon. member.

Amendments agreed to.

Clause, as amended, agreed to.

Clause 18:

Mr. Chairman, in terms of the provisions of clause 18 the power to make regulations is being taken away from the Cabinet as a whole and given to the Minister himself. The question I want to raise with the hon. the Minister is whether he himself regards this as a desirable practice in the circumstances, bearing in mind the very wide powers that are granted in terms of this clause, because the regulations can create new laws; the clause goes as far as to state that the Minister can do virtually anything which is not inconsistent with the Act. Does the hon. the Minister not regard it as undesirable that there should be personal responsibility resting with him, rather than Cabinet responsibility, as far as the new powers are concerned?

Mr. Chairman, I think the hon. member has raised an important point. This change is, in fact, in line with a few similar changes that have been made in comparable legislation, particularly in the past few years or so. I think it is simply a question of approach. I do not think it is correct to say that one is necessarily taking the powers away from the Cabinet, because anything important, in this regard, would certainly be raised by the Minister in the Cabinet. That, in fact, is how we work it in practice. In practice I do not think it is going to make any difference at all. I take the hon. member’s point in principle, but unless there is a Minister who is simply prepared to ride rough-shod over the matter and to take arbitrary decisions, in which case I think he would be very ill advised because he would be caught out at some point or other on the grounds of not doing these things in a reasonable way, possibly, it will not happen. There is no more to it than that. The Office of the Registrar discussed this at some length and feels that this perhaps makes for smoother administration, but in practice I can give the assurance that the intention will not be to bypass the Cabinet on any important matter, because it is our practice to raise those matters in the Cabinet. I hope the hon. member can accept it in that spirit.

Clause agreed to.

Clause 27:

Mr. Chairman, I merely want to refer to the falling away of hire-purchase banks and savings banks. I do not oppose this provision, but I think it would be inappropriate if nothing were said about their falling away because, firstly, I have a personal sentimental attachment to these institutions and, secondly, because I believe that savings banks in particular—if I may deal with them initially—have played a very meaningful role in the building up of financial institutions in the Republic. Whereas savings banks will not disappear in reality—they are only disappearing by way of definition—I think it is appropriate that one should pay tribute to many of the people who started savings banks from very small beginnings and have created very substantial financial institutions as a result of it.

Secondly, hire-purchase banks have been a substantial departure from ordinary finance houses which either relied upon their own money or relied on grey market operations in order to provide money for consumer finance. In fact, hire-purchase banks played a very meaningful role in the whole process of the sophistication of the financial market in South Africa, and with the passing away of the names of these two institutions from the Banks Act I think it is perhaps not inappropriate to pay tribute to many people who have played a part in the building up of the banking industry in South Africa in these two fields.

Mr. Chairman, I am glad the hon. member for Yeoville has said what he has said because I agree with him fully that the role which these categories of banks have played, not only in our banking history, but also in the development of this country, is of the greatest possible importance. The present Cape of Good Hope Savings Bank began as the Cape of Good Hope Bank and was, I think, our first formal bank in South Africa, and it is still going strong. However, as the hon. member says, it is simply a formal reclassification, and I think that many of these famous institutions will continue to use their present names, so at least we shall have those names before us. So bearing in mind our sense of tradition, and the appreciation one has for the role played by these institutions, I am very glad that the opportunity has been taken to give credit to what are, I think, really very fine institutions which will, I am sure, certainly continue.

Clause agreed to.

Clause 30:

Mr. Chairman, I should like to refer to the proposed section 18(2), which contains the power the Minister will have to alter the percentages. That is a very wide power. One accepts that by reason of changing economic circumstances it is necessary that that power should be exercised outside of Parliament even though normally one would prefer this to be done solely by Parliament.

I had intended to move an amendment to the effect that when the Minister did this, he should only be able to do so from a future date to be specified in such a notice, because quite obviously one has to give some degree of notice to institutions in order to do this. However, bearing in mind the practice that has existed in the past in regard to consultation and in regard to the question of not imposing this on institutions in a manner which they cannot comply with, I would assume that the Minister will only do this from a future date to be specified and after adequate notice has been given to the people concerned. The draft provision covers the question of future dates, but I should welcome an assurance that this will only apply to future dates and that it will be used in such a manner that it will not create embarrassing situations for financial institutions.

Mr. Chairman, the last thing we would wish to do is to create any kind of embarrassing situation in this regard. That is undoubtedly the spirit in which we shall approach this whole matter. In a sense it is an important point, and I am glad the hon. member sees the practical usefulness of such a measure. During a parliamentary recess of six months or seven months, or whatever it is, we shall at least have that sort of flexibility in the rare cases in which it might possibly be necessary to use it. The hon. member will be interested to know that in a recent report of the IMF’s commission which came to South Africa—as the hon. member knows, the IMF from time to time sends missions to member countries where they look into the economy and make various recommendations—they commented on the very narrow and small measure of discretion the Minister of Finance in South Africa has to vary financial ratios and even to change taxes. I feel very strongly that matters of taxation are essentially matters for Parliament. That is why the only discretion we have taken has been the discretion to alter loan levies without doing it through Parliament, as we regard that a loan levy is strictly speaking not a tax, but actually a loan which attracts interest, although I must admit it is a compulsory loan at the time it is levied. However, we pay it back with interest. I have mentioned that the IMF mission has looked at these matters. In this regard the Reserve Bank is perhaps an analogous case. In determining these liquid asset requirements, the Reserve Bank has the discretion to do that, and I really do not think anybody will feel that it has not acted with the greatest responsibility at all times. It is in exactly the same way that we shall approach this matter. The Registrar can then recommend to the Minister that when Parliament is not sitting it might be necessary to change the percentage of prescribed investments by banks, but I think it will be used extremely sparingly and with great care.

Clause agreed to.

Clause 31:

Mr. Chairman, I should like to say to the hon. the Minister that I have some misgivings about this clause. What worries me is that financial institutions—I am particularly referring to banks— have found themselves in the classical situation of finding themselves in financial difficulties when they have over-invested in immovable property.

We have had examples in South Africa over a period of time. In fact, we still have one institution under curatorship as the result of this very kind of situation. There are other examples of rescue operations having had to be mounted in order to safeguard financial institutions which had over-committed themselves in regard to immovable property, and I use that term in the broad sense of the word to cover all the various ways in which they can invest in immovable property. I for one supported the concept that there should be a restriction on banking institutions holding fixed property and a restriction on what they could actually invest in. I have always been in favour of a very strict provision in respect of that matter because, to my mind, that is the loophole that can run one into difficulties on this issue.

That was the law as amended some years ago with our approval. Having gone through a very difficult period, in respect of the question of immovable property, that law having been applied during that particular period of time, we now find that an amendment is to be introduced which reads—

What is therefore now happening is that although the door has not been opened, it has been unlocked. Therefore somebody can start pushing on it in order to get in and persuade the hon. the Minister that he should give his permission for these very strict provisions to be, not necessarily ignored, but at least relaxed. I do not want to tell the hon. the Minister that we shall vote against this. I do not want to tell him that he is not going to exercise the discretion with the utmost amount of circumspection. However, I think that he does owe us some explanation. Firstly he has to explain why, from the point of view of timing, it is being introduced now, because the time for giving some assistance or some consideration was quite some while ago. Secondly he has to explain on what principles he intends to exercise the discretion which is being granted here. Thirdly, does he not agree that this over-investment in immovable property, by a banking institution, is one of the greatest dangers to the whole stability of banking institutions as such and therefore has to be very carefully controlled? I should like to hear his reply before I react further in regard to this situation.

Mr. Chairman, the hon. member for Yeoville is quite correct in saying that any tendency on the part of banks to over-invest, as he put it, in fixed property can cause great problems, as we have seen in the recent past. There is no doubt about it. I think that our banking fraternity has learnt a hard lesson that I am sure will not be forgotten very easily. However, this is simply an extension. It is giving a discretion to the Minister, and I quote—

There is a practical side to this. One aspect is, as the hon. member knows, that we are very keen to see fairly substantial private investment in the new Sasol scheme. It may well be that a banking institution is in a position to invest and may wish to avail itself of the opportunity of making that type of investment. It may therefore well be necessary to have such discretion in order to make it possible for a banking institution to make a substantial investment of this kind whereas, if this amendment is not enforced, it might be precluded from making an investment of the size it may possibly be able to make. That is one aspect which could be relevant, though I am not saying that it is necessarily so. Time will tell. However, it is one consideration that is involved here. I am not in any way losing sight of the importance of the point raised by the hon. member because, as I have said before, I agree that any unduly large investment by a bank in property can, if circumstances turn against the bank, be very awkward. However, we are watching that aspect very carefully. I can assure the hon. member that we are not likely to give this approval unless we are absolutely certain that there is a first-class reason for it.

Mr. Chairman, I am sorry to have to come back to this, but it is a matter which causes me some concern and perhaps I can be forgiven for coming back to it. Firstly, I do not believe that this section has anything to do with Sasol, because this section provides that the total amount a banking institution’s investment in fixed property, in loans and advances to subsidiaries of the banking institution of which the main object is the holding of fixed property and in shares including shares in subsidiary companies of the banking institution, shall not, except with the written approval of the Minister, exceed certain limits.

I am concerned with the fixed property part of it. If it is a question of a banking institution investing in shares in Sasol, we have a different situation altogether. For example, if it is to provide that in the respect of the Sasol issue a special exemption may be given to institutions to invest in shares in Sasol, then it is a matter quite distinct from this one. I am not aware that we have in mind that banking institutions will invest vast sums of money in shares in Sasol. If that is so, perhaps we ought to hear a little more about it. At the same time to create very large shareholding in an institution even such as Sasol, is an issue which I think has to be dealt with very circumspectly. There is quite a big difference between, for example, the big insurers, whether it be Sanlam, the Old Mutual or anyone of those big mutual insurers, investing large sums in Sasol shares, and banking institutions who really should preserve a greater degree of liquidity and whose function is not really to be in the share market.

I am more concerned, however, about fixed property. I am more concerned about a banking institution investing too large a proportion of its resources in actual immovable property. That is what worries me and I would certainly like the hon. the Minister’s assurance that in so far as the approval which he has to give is concerned, it will be dealt with very, very circumspectly and that there will only in very exceptional circumstances be given permission to banking institutions that their investments in fixed property can exceed their paid-up capital and unimpaired reserves.

Mr. Chairman, I personally hope very much that some of our banks will be able to make a contribution to the capitalization of Sasol, because in the way the whole capitalization scheme has been worked out, I think it is a very good proposition. We shall have to see, however, and I am merely making that possible if it should happen. Let us take the case of a bank which does that and, because he does that, finds himself in trouble since the total amount exceeds the bank’s paid-up capital and unimpaired reserves; i.e. the amount in shares and property. It is merely to give flexibility there that this provision is included. If we were not to include this provision, it might well happen that a bank which put money in an undertaking like Sasol would have to sell its fixed property immediately in order to keep within the present requirements. It could happen and we are just trying to obviate any danger where the investment in property may not be excessive at all. This provision is included in the section to allow that measure of flexibility.

The hon. member may be quite sure that, in the light of the experience the country has had in this field, neither the Registrar nor I should like to see any bank put an undue amount in fixed property. I can assure the hon. member that would be the last thing I should like to sanction.

Mr. Chairman, I am not going to pursue this unduly except to issue one last word of caution and that is that the hon. the Minister puts himself in a very difficult position when he gives permission in terms of this, because if anything goes wrong, then he will actually have given permission for that particular conduct of business. It puts a tremendous onus upon him and therefore I hope, as he has indicated, that it will be very, very rarely given, because here he actually puts himself into the position where he will have to account to Parliament if a banking institution as a result of a permission which he grants, finds itself in difficulty. I therefore hope that we shall not have that situation arising.

Clause agreed to.

Clause 32:

Mr. Chairman, we now move into the field of building societies. In terms of this provision, as the hon. the Minister knows, we are allowing the building societies who had to foreclose their mortgages on vacant land, to build on that land through their development corporations. I understand that the Association of Building Societies requested this. It seems to me, however, that the present wording limits the provision to dwelling houses as such. I think that that would be in order if, for example, the mortgage were foreclosed on a township zoned as special residential, i.e. for dwelling houses only. I think that it would be within the scope of what is contemplated in this clause for those concerned, having foreclosed, to erect houses in a township of that nature. With regard to the single or isolated stand, I do not think the building society would lose a great deal of money, although obviously they can save by being able to build on that stand.

I do think, however, that the building society could get into difficulty in the case where the stand, on which the mortgage has been foreclosed, is zoned general residential, in terms of which a block of flats could be erected there. Very often in the case of blocks of flats being erected, shops are permitted below them if there are limited business rights. I do not know whether in that case building societies will want to go that far. They could, however, lose a lot of money in the case where the site is a valuable site on which those rights apply.

I think the hon. the Minister will, therefore, agree with me that the present wording does not enable the building society to erect a block of flats and, particularly, a block of flats with shops below. I do not, however, intend pressing the point or moving an amendment to this clause. I simply want to point to this possible difficulty and perhaps the hon. the Minister can give that consideration in the future. I think it will assist the building societies if that is in fact done. At the same time it is not my intention that the building societies should compete too much with private enterprise. However, in the case where building societies have invested money, I think this protection is needed.

Mr. Chairman, I should like to read this clause—

1. (a) by the substitution for paragraph (b) of subsection (1) of the following paragraph:
   1. “(b)(i) to buy in immovable property mortgaged to the society, and to erect on such property that is vacant land dwelling houses, with or without the outbuildings incidental thereto; or
   2. (ii) to acquire leases of or licences to land ceded to the society in security for debt;”; and
   3. (b) by the addition in subsection (1) of the following subparagraph to paragraph (mB):
   4. “(v) the erection of buildings for residential purposes on land bought in under paragraph (b) by a society holding shares in it:”.

The question centres around the words “for residential purposes”. I shall look into that matter as soon as possible with the Registrar. I think that, obviously, the emphasis here is on dwelling houses. I do not think we are over-enamoured of the idea of also applying this to various types of blocks of flats with all sorts of commercial appendages. However, I take the point and I shall clarify the matter a little further.

Clause agreed to.

House Resumed:

Bill reported with amendments.

Bill read a Third Time.

Mr. Chairman, my discussion applies equally to clauses 11 and 12. I just want to clarify a point with the hon. the Minister, and that is whether in regard to the accounts that are going to be audited, subject to the provisions of clause 18, which we shall be debating, there will be a report to Parliament and whether the report will be referred to the Select Committee on Public Accounts. We should understand that, subject to the possible requirements of State security, which we shall presumably be debating when we get to the discussion of clause 18, we should adopt the same procedures as are adopted in regard to any other account presented by the Auditor-General to this House.

Mr. Chairman, I think we can deal with that point when we discuss clause 18.

Clause agreed to.

Clause 15:

Mr. Chairman, may I ask the hon. the Minister to indicate his attitude on the following point? Bearing in mind that this is now going to be the accounting responsibility of a person who is not actually, in the normal course of events, the accounting officer, would it not be more desirable, in the case of an assignment contemplated in the proposed new section 15A(2), for the accounting officer himself to have the actual responsibility, even though the duty may well be exercised by the person in charge of what is actually only a subsection of the overall activity? In other words, should there not really be someone who is completely in charge of the Vote, even though one may have delegation of responsibility to some extent?

Mr. Chairman, this will, I think, only happen very rarely in practice. There will probably be only one or two people involved, but they will be senior people holding the position of director. There is consequently no question as to their actual responsibility.

To say, however, that in those circumstances the head of a department should, as such, still be the accounting officer, in the final sense, over and above the other person’s head, would in my view tend to negate, to some extent, what we are trying to do because this is really a question of convenience. I am, however, quite prepared to take the matter up further with the Treasury to see whether the Treasury feels that it is strictly necessary. We were of the opinion that this slight breaking down of the responsibility could be very useful in practice, seeing as one is dealing with very senior people. I am quite prepared, however, to take the matter further. I think that there will be an opportunity later, even perhaps during the Third Reading debate on the budget, to take the matter further with the hon. member. I should just like the opportunity to consider the matter further.

Mr. Chairman, I am quite happy with the approach of the hon. the Minister in this respect I merely want to point out that the seniority of officials is unfortunately not always an absolute guarantee of their reliability. It is an exception, I accept, that all our senior officials are responsible people with limited exceptions. However, we have unfortunately had this experience, and I believe that one has to have some degree of safeguarding.

Clause agreed to.

Clause 17:

Mr. Chairman, clause 17 needs to be read with clause 8, a clause which we passed by quite rapidly before I could get up. However, I did raise these matters during the Second Reading. Unless my memory is playing tricks on me, I do not think the hon. file Minister was in a position then to give an answer to the question I was asking. That is the question which relates to the South West African Broadcasting Corporation. Ex facie these figures it would seem that the Broadcasting Corporation of South West Africa somehow lost R3 million, which the SABC is now having to write off from its own capital. One wonders how this came about. If it is simply the case that the South West African Broadcasting Corporation was operated at that kind of loss over a period, it may be an argument with the Government that broadcasting is a necessary service to provide, and that one must be able to do it even at that kind of loss. If so, I should like to know what is being done about the prospects of bringing the accounts of the organization into balance, either by selling advertising time, or in some other way, perhaps by increasing licence fees. I should very much appreciate an answer to this from the hon. the Minister.

Mr. Chairman, with your permission I should like to refer to clause 8. We should really read clause 8 in conjunction with the clause under discussion. As is clear from the explanatory memorandum, the total loan authorization of the SABC for service in South West is altogether R5,035 million. The amount already drawn and spent in South West by the SABC is the amount of R3,180 million, which leaves the balance of R1,855 million. That part of the loan is to be transferred to the Broadcasting Corporation of South West Africa. I do not believe there is any problem in that regard.

I just want to point out that the loan of R1,855 million is now being transferred to the Broadcasting Corporation of South West Africa in order to finance the capital assets of that corporation. Therefore the SABC must now be relieved of any obligation in that regard. How the Broadcasting Corporation of South West Africa uses that money is their own affair.

In any event it has nothing to do with us.

The capital assets created with the already existing amount of R3,180 million is therefore now being donated by the State to the Broadcasting Corporation of South West Africa. That is what this really amounts to. This amount has for the most part been utilized for the construction of transmitters. For example there are two broadcasting stations in Windhoek, one in Lüderitz, one in Oshakati and other transmitters elsewhere in South West. It is also being utilized for the construction of smaller buildings and the establishment of studio facilities. As I have already said, that amount will be donated to the Broadcasting Corporation of South West Africa or, as I said the other day, is being granted to the corporation as a dowry. We hope that it will be regarded as an appreciated gesture on our part. It will enable the Broadcasting Corporation of South West Africa to set off on a sound footing.

It is in fact in that sense that the SABC is writing off the amount in question as a donation. I hope that I have satisfied the hon. member for Parktown with this explanation.

Mr. Chairman, I thank the hon. the Minister for his explanation. My memory certainly left me in the lurch. It was only when the hon. the Minister again used the word “dowry” that it occurred to me that he replied to me on this point the other day.

Clause agreed to.

Clause 18:

Mr. Chairman, I move the amendment printed in my name on the Order Paper, as follows—

I want to motivate this amendment by indicating to the hon. the Minister that the principle behind this amendment is that there should be a report, but that the report should be limited “to the extent that the Minister, after consultation with the Prime Minister and the Auditor-General, may” determine. The present wording of the clause means that the Auditor-General only reports to the extent that the Minister determines. I am, therefore, seeking to establish by this amendment that there must be a report, but that such report can be limited by the Minister after consultation and it can be limited, such limitation obviously bearing in mind the national security considerations that are involved with this.

I also want to refer to the question that I put to the hon. the Minister earlier and which I hope he will deal with at the same time, namely whether he accepts that the report will be tabled, that it will be referred to the Select Committee on Public Accounts and that it will be dealt with in exactly the same way as any other auditor’s report on any other department of State.

Mr. Chairman, as I indicated in the Second Reading debate, I am prepared to accept the amendment moved by the hon. member for Yeoville. I should not like there to be any suspicion that we are, as it were, trying to curtail anything the Auditor-General may wish to include in his report. We would like him to issue a report, but in the matter of publishing there is this limitation. As I have said, I am quite prepared to accept the hon. member’s amendment, because his wording perhaps makes it clearer still.

Secondly, the Auditor-General will report in the normal way. His report will be tabled and will be available to the Select Committee on Public Accounts.

Mr. Chairman, in the course of the Second Reading debate I did indicate to the hon. the Minister that we, in the NRP, had some reservations about the Prime Minister’s figuring in this clause. It was explained to me, however, that this was one of the Erasmus Commission’s recommendations, made because the Prime Minister is head of the security services, has all the information at his disposal, would know what is going on and would therefore be able to come to an arrangement as to what should be reported. My party feels very strongly that, not only should the Minister consult with the Prime Minister and the Auditor-General, but that Parliament itself should also figure in this by virtue of the inclusion of the Select Committee on Public Accounts in this particular clause. The hon. member for Schweizer-Reneke made a particular note of the fact that the effect of the previous clauses has been to bring Parliament and the Select Committee on Public Accounts far more into the picture. I made the point during the Second Reading debate that this is one of the few occasions when Parliament has taken a step towards curtailing the powers that the Executive has. I think that, in a case like this, if the Select Committee on Public Accounts were also required to be consulted by the Minister, it would have the effect of Parliament itself being aware of what was going on. I know there are problems, and people will say that if one were to make the Select Committee on Public Accounts a party to the consultations, it would know everything that is going on and the element of secrecy would then fall away. I think, however, that it may well be necessary that the rules of the House governing the operations of the Select Committee on Public Accounts may have to be altered. My party feels very strongly that in this particular case it is desirable practice and that the hon. the Minister should be obliged to consult the Select Committee on Public Accounts. It would be interesting to hear the hon. the Minister’s comments on this.

Mr. Chairman, I am not at all prepared to say that the hon. member has not raised an important point. I think it is an important point. We have tried to bring about a considerable improvement here, and the hon. member obviously knows that it is now a question of the Auditor-General submitting a report. Then, before final publication of the report, the Minister has the discretion to look at it, to consult with the Prime Minister and the Auditor-General himself and, where there may be questions involving important matters of State security, be given the power to see that that particular aspect is not published. That is as far as it goes. The report would then be tabled and, as I have said, referred to the Select Committee on Public Accounts.

I must say that I doubt very much whether I shall be able to accept that the Select Committee must also have a say in what is published. I think that what we ought to do here is to try out this proposed method in practice, because I think it is a considerable improvement, and see how it works. The next Select Committee is certainly going to have every opportunity to see the report, as published. I am, however, quite prepared to look at the matter further in the light of what the hon. member has said. It will mean discussions at various levels. At the moment I see some difficulties, but I am quite prepared to reconsider the matter, without committing myself however.

Mr. Chairman, I thank the hon. the Minister for what one might call a rather quiet commitment to the idea which has been raised. I know there are problems, but I do want to emphasize again that what we are asking for is that Parliament itself, and the arm of Parliament, which is the Select Committee, should be party to the discussions and to the decisions which are taken, because the decision is to be to exclude certain matters from the knowledge of Parliament. I know there are problems, and one can understand that there are matters which are so vitally secret that the hon. the Minister would want to exclude them from publication, but I do think that one ought to be able to say that the Select Committee on Public Accounts could be trusted to be party to a decision which is taken to exclude such knowledge from the public at large. I think that is the real point about it. Quite apart from the security angle, the hon. the Prime Minister is a public figure and a member of a political party, and I think that from that point of view, for the hon. the Prime Minister’s own protection, it would be desirable for Parliament as such to have some knowledge of what was going on. I should therefore like to ask the hon. the Minister whether he would consider this matter. When this legislation goes to the Other Place we shall place the appropriate amendment on the Order Paper for his consideration. Perhaps the hon. the Minister can then give us an answer there.

I accept that and I shall consider the matter at the appropriate time.

Mr. Chairman, may I briefly set out our attitude towards the hon. member for Mooi River’s amendment? The issue is whether Parliament should share the responsibility for what is published and what is not published and whether the Select Committee on Public Accounts should or should not have knowledge of those portions in the report that are possibly going to be deleted. There are two issues at stake. The first is that the precedent has been created, in regard to the Select Committee which is being appointed to sift through the evidence of the Erasmus Commission report, in that a committee of the House is going to be allowed to make the decision on what is in the national interest and should or should not be published. In other words it seems, to us at least, that the Government has accepted the principle that the responsibility for what should be published or not should be shared by the Executive and the Legislature. That being so, I think that the hon. member for Mooi River’s case for including the Select Committee on Public Accounts becomes an extremely strong one.

The second point is that there is a precedent to which I should like to draw the attention of the hon. the Minister. In the procedures relating to what Select Committees should do, there is a precedent for the manner in which the Auditor-General should report. In fact, it has been laid down by resolution of the Select Committee in respect of a number of matters, the Select Committee on Public Accounts actually setting out the manner in which the Auditor-General should report on certain aspects. I think that is a parliamentary precedent that the Select Committee on Public Accounts should be involved in the matter. For those reasons, whether the amendment eventually accepted by the hon. the Minister is worded exactly as is the one of the hon. member for Mooi River, we shall support the spirit of his amendment.

Amendment agreed to.

Clause, as amended, agreed to.

Clause 19:

Mr. Chairman, during the Second Reading I raised the matter relating to the Sugar Association and the loans made, and the hon. the Minister of Economic Affairs indicated that he would say something about it.

Mr. Chairman, I should like to explain the position. I just want to say that no new principle is contained in this clause. The amount of the loan to the Sugar Association of which the repayment can be guaranteed by the Government, is merely being raised. For the information of the hon. member, as well as that of other hon. members, I should like to say that the attitude and policy of the Government in respect of prices as far as the sugar industry is concerned, are based on the concept that the domestic price paid for sugar should be more or less equivalent to the production cost. The production cost in the sugar industry includes of course the profit of the growers as well as that of the millers. We are therefore dealing with a slightly different concept to that of normal production costs. On the other hand, I can say that when there are high returns in the foreign market, part of that has to be paid into the Stabilization Fund. In this regard I want to give my own opinion for what it is worth. I believe that we have learnt certain lessons. When the position tends to be favourable, we must ensure that the Stabilization Fund should at least be equal to the value of one particular year’s harvest. That will bring about far more stability in the industry.

In recent years, however, the position in the world market has changed drastically. For the reasons to which the hon. member for Mooi River referred, prices in the world market have dropped during the past two years to a level far lower than the production cost of sugar in South Africa. Due to the particularly low prices achieved over the past two seasons and the fact that South Africa has to sell 50% of the sugar which is produced here, on the world market, the yield during the 1978-’79 season and that of the 1979-’80 season will be insufficient to cover the production costs of the industry. Again I am speaking in terms of the formula with regard to the profits received by the two components of the industry. Consequently the industry itself decided to supplement these shortages from loan funds until such time as the market and prices improve. Those loans can be negotiated internally and abroad, if the repayment is guaranteed by the Government. For this purpose, the existing power of the Minister of Economic Affairs has to be extended by increasing the maximum amount which the Government is allowed to guarantee from R16 million to R50 million.

I now come to another valid argument which the hon. member for Mooi River raised. He expressed the opinion that the financing of operating costs by means of loan funds was risky—and I agree with him about this in principle—particularly if there is no assurance as to when prices in the world market will improve. As I have indicated, I agree with the hon. member in this regard, but I just want to ask him to bear one thing in mind, and that is that the deficits are financed by means of long-term loans and that those loans represent a minimal amount in comparison with the total turnover of the industry, while the industry itself will absorb part of the shortage and do everything possible to keep the production costs as low as possible. Two things are relevant. Because they are long-term loans, the repayment represents a relatively small part of the total turnover of the industry. Furthermore, the industry has undertaken to pay part itself and for the rest to reduce its costs as far as possible.

Mr. Chairman, I think we are indebted to the hon. the Minister of Economic Affairs for his explanation. However, there are two questions which arise from it, and I should be grateful if he could deal with them. The first question is whether he regards the accounting practices which appear to be adopted by some of the companies involved in this industry, practices whereby they virtually treat these loans as being income, as desirable, because it appears to be the approach of even companies which are listed on the Stock Exchange that they treat these loans almost as if they are income.

There is a second question I should like to put to the hon. the Minister. As far as the possible use of sugar cane in the production of fuel is concerned, is it contemplated that these provisions in respect of loans could also be used in order to provide capital to those concerns in order to enter that new field? In other words, is there a possibility that this kind of loan facilities can be used for a purpose other than the original purpose to which the hon. the Minister has referred?

Mr. Chairman, the whole purpose of the legislation we are now considering, is only to increase the amount in respect of which the State has to furnish a guarantee, from R16 million to R50 million. Secondly, it is not anticipated that the State will provide the Sugar Association with a guarantee in respect of activities other than purely the financing of the harvest as such, and of the millers. Thirdly, it is equally important to realize that the funds in the form of loans are in fact granted to deal with the existing position as long as the prices of sugar remain so low on foreign markets. It is true, of course, that as a result of that, the profits for both the growers and the millers are financed out of loan funds. The reason for this is that we regard it as a short term problem and that it has to be dealt with as such. I want to suggest, however, that my successor will take the House into his confidence at a later stage when this provision must be further implemented.

Clause agreed to.

House Resumed:

Bill reported with an amendment.

Bill read a Third Time.

Mr. Speaker, I move—

It is true that the so-called revenue laws, i.e. transfer duty, stamp duty, estate duty and marketable securities, no longer play the same role in the fiscal structure of our country as they did a century ago. Nevertheless, they remain valuable and indispensable sources of revenue for the State. Although it may not be a matter of great interest or offer much consolation to those who become liable to pay these taxes and who find that they have to make a contribution to the Treasury, it is nevertheless interesting that two of the levies, i.e. stamp duty and transfer duty, have a history which goes back to the centuries when the idea of a settlement at this southern tip of the continent of Africa was no more than a dream of our forefathers. Transfer duty virtually came ashore with Simon van der Stel, and was first levied in South Africa in 1686, while stamp duty immigrated not long afterwards. Estate duty, too, is a tax which originated beyond our borders, but it has been levied here in some form for so many years that it can no longer be regarded as stranger.

To abandon these well-proven and profitable forms of taxation at this stage would be foolish, but it must also be admitted that in order to retain its value, any tax system has to keep abreast of changing times and circumstances. The object of this Bill, therefore, is of a two-fold nature: Firstly, it gives effect to the tax proposals I announced in my budget speech, and secondly, it introduces certain amendments which have become necessary as a result of changing circumstances. I may add that the latter amendments originated in representations received from inside as well as outside this House. Hon. members will readily understand that it has not been possible to accept all proposals—to have done so would have meant that no taxes whatsoever could be levied—but where it has been at all possible to comply with reasonable and practical proposals, this has been done.

I shall now proceed to discuss the various clauses of the Bill.

The Marketable Securities Act, 1948, provides for the levying of a tax with regard to every purchase of marketable securities by a stockbroker on behalf of someone else. In other words, it is a tax on transactions taking place on the Johannesburg Stock Exchange. The present rate of taxation is 1½% of the amount for which the marketable securities are bought. The amendment introduced by clause 1 reduces the rate of taxation to 1% of the purchase price of the marketable securities. After the concession made in 1977, the effective rate of this tax is only 50% of what it was two years ago.

Clause 2 introduces two amendments to section 9A of the Transfer Duty Act, 1949. Hon. members will remember that in terms of the Sectional Titles Act, 1971, which came into operation on 30 March 1973, it became possible to obtain ownership of, for example, one flat in a block of flats. As far back as the ’forties, however, some people obtained the right to occupy flats permanently by buying so-called block shares in development companies. Section 23 of the Sectional Titles Act provided for the conversion of such rights of occupation into rights of ownership, and in order to enable the holders of block shares to avail themselves of this facility without paying an unreasonable amount in transfer duty, section 9A of the Transfer Duty Act provided that the amount of the transfer duty would be based on the amount which the occupant of the flat paid for his block shares, as well as his share of the cost of drawing up the sectional plan. A further effect of the section is that transfer duty is calculated at the rate which applied at the date on which the block shares were bought Because the implementation of the Sectional Titles Act was not expected to present any problems, the said section 9A allowed the holders of block shares a period of one year after the date of commencement of the Sectional Titles Act to make use of this concession. If they did not act in time, a fine would be payable as from 30 September 1974 at a rate of 7½% a year.

In practice, the Sectional Titles Act presented several initial problems, with the result that few if any block shareholders made use of their rights in terms of section 23 of that Act, and as far as is known, no one benefited by the provisions of section 9A of the Transfer Duty Act.

The present provisions of section 9A now virtually prohibit the conversion of rights of occupation into rights of ownership, for even if the amounts of transfer duty are still reasonable, a fine is payable at 7½% a year as from 30 September 1974. That is a period of one year after the date of commencement of the Sectional Titles Act—which was 30 March 1973—plus the six month penalty free period allowed by the Transfer Duty Act. In addition, there is the fact that the rates of transfer duty have been considerably reduced since 1973, even to the point where in spite of today’s increased prices, the value of some flats is low enough to result in total exemption from transfer duty or to ensure, in any event, that the transfer duty will be considerably less than the amount, plus the fine, which would be payable in terms of section 9A if it were decided to obtain ownership.

Accordingly, clause 2 introduces two amendments. In the first place, it extends the period within which it is possible to make use of section 9A, but without paying a fine on transfer duty. This concession will benefit those who bought their block shares years ago at a low price. It must be noted that the conversion of right of occupation into right of ownership must take place before 30 September 1981 in order to avoid payment of the fine.

The second amendment provides that the person who wants to have his right of occupation converted into a right of ownership can choose not to make use of the provisions of section 9A. If he does exercise a choice, the transfer duty will be determined in accordance with the usual rules, i.e. on the value of the property at the date of payment of the transfer duty, at the rate applicable at that date.

I come now to the question of estate duty. This duty is levied on the taxable amount of any estate. The expression “estate” includes not only tangible assets such as immovable property, bank deposits, shares, etc., but also rights, such as annuities and usufructs which pass to someone else at a person’s death. In order to combat tax evasion, property which is deemed to have belonged to the deceased is also brought into the ambit of the Act. Included in this category is a right to an annuity paid by a fund. This concept includes an annuity paid by a pension fund or a retirement annuity fund, which wholly or partly survives the deceased and which is paid to another person—usually his widow— after his death. In such a case, the value of the annuity is calculated at 12% over the expected life of the annuitant, and the amount thus capitalized is included in the property of the deceased.

Representations have been made to my department and myself from time to time for the exclusion of this capitalized amount from the value of an estate. In many cases, the inclusion of the amount is of merely academic interest, because most pensioners who die do not have sufficient assets to make their estates liable for estate duty, especially if they were married and had children, or when husband and wife were both elderly and the capitalized value is not great. There may be exceptions, however, and even though my department has not yet encountered the exceptional case of the man with a big pension and a young wife and children—i.e. the case where the capitalized value may be great—it is nevertheless possible that cases may come to light where levying of estate duty on this right which passes to someone else at the death of a pensioner may cause hardship for the remaining spouse. I therefore propose that section 3(3)(a)bis of the Estate Duty Act be amended to provide that the capitalized value of an annuity payable by a pension fund which has been approved for the purposes of the Income Tax Act will no longer be regarded as property which is deemed to be property of the deceased. The relevant amendment is contained in clause 3 of the Bill.

It may well be asked why a similar concession is not being proposed in respect of annuities paid by retirement annuity funds. My reply to that is that there is a clear difference between pension funds and retirement annuity funds, as well as between the circumstances in which contributions are made to such funds. In the case of a pension fund, the employee usually has no choice. Membership is a condition of employment and his contributions are simply deducted from his remuneration. The employer adds his contribution and the total amount is then paid into the fund, where it remains until such time as the employee reaches retirement age. If the former employee dies after having retired, leaving a spouse, the pension which survives him and which passes to his widow or other dependants is the product of the contributions made by his employer as well as by himself.

In the case of a non-contributory pension fund, of course, the full pension is to be attributed to the goodwill of the employer. However, the choice of joining a retirement annuity fund or not is entirely up to the individual. Furthermore, it is for him to decide about the size of his annual contribution. If he makes use of the generous concessions provided for in this year’s Income Tax Bill, he will not only considerably reduce his current income tax burden, but he will also pay amounts into a fund which would otherwise have been paid into other investments which would eventually have been subject to estate duty.

†Clause 4 of the Bill makes two further amendments to the Estate Duty Act. These amendments give effect to two of the concessions announced in my budget speech on 28 March.

In determining the net value of an estate for estate duty purposes, various deductions may be made. Two of these are (a) so much of the proceeds of insurance policies on the life of the deceased and of the value of the benefits from pension, provident or retirement annuity funds passing as a result of the death of the deceased as does not exceed R35 000, and (b) so much of the value of certain public bonds and stock and of Land Bank debentures as does not exceed the difference between the sum of R70 000 and the amount deducted in respect of insurance and fund benefits. If, therefore, on the death of a deceased his estate collects R25 000 in respect of insurance policy proceeds and has R50 000 invested in Land Bank debentures, a total of R70 000 will be deductible in determining the net value of his estate.

The proposed amendments will increase the amounts deductible under these two headings from R35 000 to R40 000 and from R70 000 to R80 000, respectively.

From the net value of an estate, certain further deductions are made in order to arrive at the dutiable amount on which the tax is finally calculated. There are four such deductions, each of R30 000, the principal ones being the standard deduction, the deduction in respect of a surviving spouse and the deduction in respect of each surviving child of the deceased. The amendments to be introduced by clause 4 will increase each of these deductions to R35 000.

The combined effect of all these amendments to the Estate Duty Act will be of material value to many estates.

I turn now to the amendments to the Stamp Duties Act, 1968. The amendment made in terms of clause 6 to section 22 of the Act is of a purely textual nature and flows from the deletion of section 5(3) of the Act in 1977.

Clause 7 introduces an amendment to item 11 of schedule 1 of the Stamp Duties Act Due to a customs tariff amendment the existing wording of the item no longer describes the relevant documents correctly. In plain language the exemption covers the customs documents relating to the temporary importation of motor vehicles, yachts and other goods which are the bona fide property of tourists and which are to be re-exported within 12 months. The amendment extends the scope of the existing exemption very slightly, but hon. members will be glad to learn that, at a cost of a mere R200 per annum, a source of annoyance to tourists and an inconvenience to customs authorities at points of entry into South Africa will be eliminated.

Clause 8 amends item 15 of the Stamp Duties Act. That item governs the payment of duty on the registration of transfer of marketable securities, on the cancellation of certain shares and on the acquisition of marketable securities not involving the registration of transfer. As hon. members will be aware, the stamp duty payable under this item and the marketable securities tax are complementary. Where marketable securities are bought on the Johannesburg Stock Exchange marketable securities tax is payable and there is an exemption from stamp duty on the registration of those securities. Where securities are purchased outside the Exchange then stamp duty is payable whether or not registration of transfer takes place.

Business suspended at 12h45 and resumed at 14h15.

Afternoon Sitting

Mr. Speaker, since 1977 there has been complete neutrality between marketable securities tax and stamp duty, in the sense that the rate of both tax and duty has been the same, i.e. one and a half per cent of the consideration payable in respect of the marketable securities. In view of the decision to reduce the rate of marketable securities tax to 1%, it follows that, in order to maintain neutrality between the two levies, the stamp duty likewise had to be reduced to 1%. The amendments which clause 8 introduce are designed to give effect to this reduction in the rate of the duty.

I come now to the last clause in the Bill, i.e. clause 9, which returns to the matter of estate duty. The present Estate Duty Act, 1955, repealed the Death Duties Act of 1922, but only as respects the estates of persons who died or who die on or after 1 April 1955. The 1922 Act contained similar provisions, which means that both the 1922 and much earlier Acts, going back well into the last century, are still applicable in regard to the estates of or successions arising by reason of the death of persons who died prior to 1 April 1955. Now, as is well known, some persons seek to rule from the grave and the wills of a few persons who died many decades ago are still operative. In the result, a succession under one of these old estates occasionally comes to light and succession duty becomes payable. As is to be expected, cases of this nature will become fewer and further between with the passage of time, and the stage has now been reached where the possible small amount of revenue from this source can no longer justify the administrative work involved in watching out for liability under these old laws and, when found, assessing and collecting the duty due. The provisions of this clause will terminate liability under these old laws in all cases where such liability had not been determined prior to the date of commencement of the Revenue Laws Act, 1979. I want to thank the hon. member for Durbanville for drawing my attention, during the course of a previous debate earlier this year, to the effect of these old laws.

As indicated earlier, Mr. Speaker, we shall continue to review these taxation laws at regular intervals and, if necessary, shall introduce suitable amendments from time to time.

I commend the Bill to the House.

Mr. Speaker, the official Opposition will support the Second Reading of this measure. The hon. the Minister gave a very detailed explanation of all the provisions of the Bill. Therefore it is not my intention to go through them individually. Where I do not deal with a provision it is because we agree with it. Therefore there is no point in wasting time in expressing one’s agreement at great length.

However, may I just point out to the hon. the Minister that while he referred to the duties that have been in force in South Africa since the time of Simon van der Stel, there are also other duties which, in fact, caused a revolution in America and as a result of which there was the American War of Independence. We hope that there will be no incidents of that kind in South Africa. There certainly cannot be as a result of this Bill, because this Bill is, interestingly enough, almost entirely a revenue reducing measure, in fact a concessionary measure right from beginning to end. That is why we welcome it.

Allow me, however, to touch on a couple of things relating to this legislation. First of these is the provision in terms of clause 3. Now, I want to express my regret because the hon. the Minister has seen fit only to exclude an annuity payable by a pension fund as defined in section 1 of the Income Tax Act. As he knows, section 1 of the Income Tax Act expressly excludes an annuity payable in terms of a retirement annuity fund. Knowing that, he anticipated the opposition to this provision in his Second Reading speech by seeking to explain why, in fact, an annuity in terms of a retirement annuity fund is not excluded as well. I want to give some examples to the hon. the Minister to demonstrate why his reasoning about such an annuity not being excluded is invalid.

Firstly, let us consider the example of a professional man who is today entitled to incorporate his practice. If he were to incorporate his practice, he would be entitled to have a pension fund. In fact, we have had certain amendments that have enabled people to continue membership of pension funds in certain circumstances, with particular regard to incorporated professional practices. So when that particular lawyer, architect, quantity surveyor, accountant or whoever it may be, dies, the annuity, which is payable in terms of the pension funds created by that particular corporation for the benefit of the employees of that corporation, who may be very wealthy and substantial partners, is exempt. If the person did not, however, incorporate his practice, but did in fact contribute to a retirement annuity fund, it is not exempt. To my mind, that appears to me to be an injustice.

I want to give one further example. One can find very wealthy people working for large corporations. I do not have to look around very far, even in this House, to see examples of persons who work for a very large corporation and may be financially very well off.

He is not in the House at the moment, Harry.

Such a person may then have a pension which is paid to his widow. I wish him well with that, because technically speaking he is an employee, but is he, even technically speaking, really an employee? He is a person of substance, not the poor man envisaged in this instance. Why is such an individual given a preference over and above that of a man who is self-employed, perhaps has a small business and provides for his own retirement by means of a retirement annuity fund? Why is the widow of a wealthy director of a large corporation, who has substantial death benefits, given preference above the widow of the small businessman? The hon. the Minister must forgive me if I lodge a plea for the small man in these circumstances, the individual who I believe should receive as much consideration as the employer or director of a large corporation because it is the small businessmen who are the backbone of the nation’s economy in the sense that they seek to create new enterprises, new businesses and so on. What is fascinating is that it is not as though one can provide for a retirement annuity to an unlimited extent, because there are limits to the extent to which one can provide for a retirement annuity, even in terms of the Income Tax Bill which may come before the House tomorrow. There is, therefore, no unlimited provision for this. In my view, equity requires, in these circumstances, that the hon. the Minister should include the annuity that is payable in terms of a retirement annuity fund in this kind of situation.

I want to state specifically the example given by the hon. the Minister. During his Second Reading speech he said, inter alia—

That argument, I think, supports the case I have put, and the hon. the Minister states it very clearly. The hon. the Minister then went on to say—

The choice is only there because there is no pension fund provided for him, and if it was not a question of the State encouraging one to save for one’s old age, to have a pension in these circumstances, the tax concessions granted for retirement annuities would never be granted and would not, in fact, be equated with the pension fund provisions, as is being done. He goes on to say—

That is correct. He can decide how much his contribution will be, but the maximum amount which is tax exempt is limited by law. We know, as does the hon. the Minister, that it is only when there is tax exemption for a retirement annuity that it becomes a worthwhile investment for anyone to have. I should therefore like to suggest to the hon. the Minister that it is in South Africa’s interest for savings, making provision for people’s old age, to be encouraged. The hon. the Minister of Social Welfare and Pensions has at regular intervals written me letters, when I write to him about pensions, telling me that it is the obligation of the citizen to provide for his old age and not solely the obligation of the State. Therefore the citizen should be encouraged to do so, and it seems to me utterly illogical to provide benefits in these circumstances for a person who provides for his old age as against somebody who is compelled to contribute because he happens to be a member of a pension fund. I hope the hon. the Minister will reconsider the position. I shall move an amendment in the Committee Stage, or ask the hon. the Minister to consider this before he goes to the Other Place because, quite obviously, I do not want him to accept a rushed amendment across the floor of the House.

I am staying here.

I know the hon. the Minister is staying here, but the Bill has not yet been to the Other Place. That is why I am saying I do not expect the hon. the Minister to accept a rushed amendment across the floor of the House because he might well like to consider the matter before he takes this legislation to the Other Place. I therefore ask the hon. the Minister to consider the merits of the case I have put forward for many, many thousands of self-employed individuals.

I have another plea to make—and perhaps this one will not fall on deaf ears either—and it does not require an amendment. Increases have been made in the amounts of both insurance and Government Stock which are exempt from estate duty, and I should like the hon. the Minister to consider including defence bonds, bonus bonds in particular, under this heading. I think it would encourage the buying of further bonus bonds. The returns on bonus bonds are small, the interest being relatively low, and I believe it would be a worthwhile encouragement and would also accord with the concept of the amount being somewhat increased. So perhaps the hon. the Minister would also consider widening the ambit by including bonus bonds in that provision.

One last point I should like to make relates to the paying of transfer duty on the sale of marketable securities when the transaction does not go through the Stock Exchange. I wonder whether the hon. the Minister would not consider doing away with the whole concept of paying that duty at the time of sale, whilst nevertheless ensuring that the duty is paid when transfer is effected because I think a lot of abuse is possible when the duty is payable on sale, and transfer is not effected immediately. If the law is changed to make it payable only on transfer, I think the abuse would fall away, the control would be easier and obviously the obligation would be on the person effecting transfer to make sure that the duty was paid at that particular time. I think it would remove a source of abuse, because at the present moment all one has to do is to sell one’s security and have a blank transfer form which can pass through innumerable hands. Eventually one need only to fill in a date and that is the end of the story. Quite obviously that is not desirable. It is an undesirable abuse, and one could remove that by making the duty payable only on transfer.

For the rest, as I have said, we support the provisions of this Bill; so I shall not detain the House any further.

Mr. Speaker, I wish to thank the hon. member for Yeoville for his support of this Bill, not that we really expected anything else.

This Bill testifies to an open hand and a generous heart and it proves once again the Government’s confidence in the capitalist system. Every clause of this Bill expresses confidence in that system. Clause 1, in terms of which a 33⅓% reduction in the stamp duty on securities is granted, is clear proof of this. In terms of clause 2, anyone who may own a flat, and who may have been placed in an unfavourable position in respect of transfer duty because of the delay with the Sectional Titles Act, is placed in a very favourable position, and we thank the hon. the Minister for this. As far as clause 3 is concerned, it is quite clear that problems with estate duty are only experienced in a capitalist system. I cannot quite understand the hon. member for Yeoville. Even in this case he tried to create the impression that he wanted to break a lance here for the poor man and the man who struggles to make ends meet. Is this really so? Surely the people who amass vast amounts of capital are not poor. The man who has to pay estate duty is not the poor man who finds it so hard to live on his pension that he has to write about it to the Department of Social Welfare and Pensions. We should also look at the concessions the Government has already made with regard to estate duty. In 1948, a spouse with one child paid estate duty on R30 000 if provision had been made for insurance to the value of R25 000. This has now been reduced to such an extent that a person with one child now only pays estate duty if the estate is worth more than R120 000 and a person with two children only pays if the estate amounts to R200 000. Surely these are not the people we should plead for in this House. The Franzsen Commission made a very thorough study of the question of estate duty. When one considers the matter seriously, one sees that no one really pays estate duty. One does not amass large amounts of capital from one’s earnings, but in other ways. One does it by making use of the concessions that are made, with regard to annuity funds, for example, in which one can invest 15%, or R3 500, of one’s income exempt from income tax. It is with the aid of these concessions that one eventually builds up such a large estate that one has to pay estate duty on it. When that estate has to be taxed, the person who built up the estate is no longer there to pay the tax on it, in any case, while the person who receives benefits from that estate has never made any contributions to give him a right to concessions. In actual fact, therefore, this is the fairest tax one can impose on any person, because one does not feel it. When we consider that estate duty contributed only R45 million to the Treasury last year and that the Minister is now again giving up an amount of approximately R16 million in revenue in terms of these proposals, one sees that the reduction is approximately 35%. I think this is something for which every person should be sincerely grateful to the hon. the Minister.

As far as clause 7 is concerned, the hon. the Minister has said that the document of entry is actually just a nuisance for the people who import goods temporarily and for our customs office, because the total revenue from this never amounts to more than R200 a month.

Clause 9 arises from the provisions of the Death Duties Act of 1922. This has been repealed, but its effect has actually continued and has created unnecessary problems. As the hon. the Minister rightly remarked, it was the hon. member for Durbanville—who, if I interpret the whisperings correctly, has been called to a higher duty on this side of the grave—who advocated the idea that the effect of obsolete laws should be eliminated. Like the hon. the Minister, I think there are many people who are grateful to him for this. With the hon. member for Yeoville and the rest of the Opposition, we very gladly support this Bill.

Mr. Speaker, we shall support the Second Reading of the Bill. Hon. members behind me challenged me to relate this Bill to the farming community. I wish to do so in terms of clause 2. I welcome the concession whereby members of the farming community who happen to own flats in the share-block system in towns, may now take transfer on a sectional title basis. Therefore, we welcome the concession. It is a matter which has lately been brought pertinently to my attention by way of several specific instances. I think there seems to be a resurgence of interest in the sectional titles scheme. Since many flats are held on the share-block system, I think there is now going to be a greater emphasis on sectional titles, so I do welcome this very much indeed.

Mr. Speaker, this Bill is obviously acceptable to us because it makes numerous concessions. We are pleased to see that there are further concessions in regard to the Estate Duty Act. We hope that this will be the start of the phasing out of estate duty in South Africa. While the hon. the Minister retains estate duty, however, we hope that he will accept the suggestion of excluding defence special bonds for estate purposes.

In regard to the amendment to the Transfer Duty Act we made representations to the hon. the Minister’s department. That is why we are grateful that this amendment was granted, because this imposed hardships in regard to the amount that had to be paid in transfer duties when there was a conversion from the share-block scheme to a sectional title unit. This is a most complicated matter, and I am not going to detain the House with the whole history behind it. We furnished the hon. the Minister’s department with all those details. All I want to say is that this amendment seems to alleviate the problem that we made representations about.

I should like to draw to the hon. the Minister’s attention that there is a period of eight years mentioned in this amendment, a period which will presumably expire in 1981. One may find that that period will have to be extended, but this is a matter which can be dealt with in the years to come, probably during the 1980 session.

There is one further issue I should like to raise with the hon. the Minister, since he is sitting with so much money and does seem to be in a conciliatory mood. The Transfer Duty Act was introduced as a temporary emergency measure; so perhaps during the recess he could consider eliminating transfer duty completely.

Mr. Speaker, in the Second Reading I raised the question of estate duty in relation to pensions, and I should like to thank the hon. the Minister for the action he has taken. I think it will afford great relief to people in certain categories who, in fact, face the diminution of very carefully built up benefits.

I just want to take one minute to deal with the question of retirement annuities. The hon. the Minister made certain distinctions between pensions and retirement annuities. I want to point out that while a pension is in fact, as the hon. the Minister has said, very largely a compulsory form of saving which provides security, not only for the contributor in his old age, but also for his widow, in the event of his dying during his pensionable period, the surviving widow does get certain benefits. He does, in fact, obviate her having to take charity or seek State protection by other means. Therefore, he has made precisely the kind of desirable contribution referred to by the hon. the future Minister of Energy when talking under another hat.

I think it is important to remember that as retirement annuity plans now operate, the same kind of action is taken by the contributor, but on a voluntary basis. In other words, he does not merely provide for his own lifetime. He could buy that investment far more cheaply than one which also provides for his surviving widow after his death. Since this extra contribution is made by him for the purpose of maintaining his widow after his own death, I think that this should be recognized as a further contribution to social services, in the form of a private contribution to his wife’s care and maintenance after his own death. To take this away by way of estate duty is, to my way of thinking, to work against the purpose of the extra investment he has made. After all—and I think that the hon. the Minister will readily agree—the kind of investment providing only for the contributor’s surviving period, from retirement to death, would be a great deal cheaper than the investment providing for the continuation of annuity payments to his widow after his death. Since this is obviously a service that is of benefit to the community, I believe it should be supported by the State and should not be diminished by a form of tax which compounds the value of that investment and deducts it for State revenue purposes. I put this further consideration to the hon. the Minister because I believe there is substance in the argument that this kind of investment deserves to be encouraged and not discouraged.

Mr. Speaker, I should like to express my appreciation to hon. members on both sides of the House for their support of this measure. It is quite clear that if one desires the support of the whole House, one has only to introduce a few tax cuts. In any event, I am glad that we have been able to do so in this respect, and I am also very glad about the reaction of the House as a whole.

†The hon. member for Yeoville raised three points in regard to the Bill. Firstly, he would also like to see excluded, from the amount subject to estate duty, the capitalized value of retirement annuity income. I understood him to say that he would come back to that point during the Committee Stage, and I can therefore leave the matter for the moment. We can take it further then so as to avoid repetition.

The hon. member for Yeoville also raised a point in regard to the possible inclusion in Government stock—the amount has now been put up to R80 000, but if there is an insurance policy of up to R40 000, the amount reduces to R40 000—of defence bonus bonds. It is certainly not an unreasonable request, and the only problem I have is that section 4(1) of the Estate Duty Act prescribes that only bonds whose interest is subject to income tax qualify for estate duty exemption. Both the interest on defence bonus bonds and the bonus are exempt from income tax, so the element of a double benefit actually applies, that is if one does what the hon. member for Yeoville suggests.

[Inaudible.]

Yes. I do not say that this is necessarily a complete prohibition on doing such a thing, but I would like a little more time to consider that. That is, however, the reason why it was not included. If we could perhaps look a little deeper into possible further implications for other kinds of investments, we could perhaps come back to that issue.

The hon. member for Yeoville also asked, in relation to the transfer of marketable securities, that a duty be payable only when registration of transfer is effected. I think he wants it to be as of the date of transfer as such. What the hon. member is, in reality, asking for is the repeal of the marketable securities tax, so that only stamp duty will be left. Am I correct?

No. It is only on the ones that do not go through the Stock Exchange.

The marketable securities tax was originally introduced partly because of the avoidance of stamp duty on brokers’ notes and partly because it was then thought that stock exchange transactions should be taxed. The marketable securities tax to some extent cures the abuse the hon. member referred to, i.e. the use of blank transfer forms to avoid the necessity of registering transfer, and thus avoiding stamp duty. Unfortunately even the existing stamp duty on the registration of transfer has been avoided, and a number of amendments have had to be introduced, over the years, to try and counteract that. I think there might be some problem in this regard, but once again it is a technical matter, and one has to keep the implications of stamp duty in mind as well. I shall take the point up with the Department, and we can perhaps discuss the matter further in the Other Place if we do not have the opportunity here. I shall take that into account.

*The hon. member for Losberg asked, quite rightly, why the hon. member for Yeoville referred in this specific case to the interests of the small man, since the poor really are not very likely, especially today, to pay estate duty. However, we may leave those considerations at that. I just want to examine the facts. The hon. member and the House may be interested in figures which indicate how the situation with regard to estate duty has improved over the years. In 1948, in the case of a surviving spouse with two children, estate duty of 5½% would have been paid even on an estate of R30 000. This was abolished years ago. In 1955, estate duty would have been payable on an estate of R50 000, even though it was not very much. Estate duty has been gradually reduced, and I just want to give the latest figures. In respect of an estate of R140 000—this is in the case of a widow with two children—estate duty was almost R33 000 in 1948; in 1955 it was R20 000 in round figures; in 1957, R16 500; in 1964, R14 200; in 1967, R11 700; in 1968-’69, R9 500; from 1970 to March 1978, R1 750, i.e. just over 1%; and since the beginning of April last year, no estate duty would have been payable at all.

On an estate of R200 000—this is the total net value of the estate, including R25 000 in proceeds from insurance policies and/or Government stock—estate duty of almost R65 000 was paid in 1948; in 1964 it was R29 000; from 1970 to March 1978, R12 600, i.e. 6%; from the beginning of April last year, R8 600, i.e. 4,3%; and if this Bill is passed, only R5 000, or 2½, will be payable on such an estate. As a final example we may take an estate of R300 000, again in the case of a widow with two children, an estate which again includes R25 000 invested in insurance policies and/or Government stock. In 1948, an amount of R107 000, almost 36%, was payable on this estate; in 1964, R54 000, or 18%; from 1970 to March 1978, R37 600, or 12½%; from April last year, R32 000, or 10,7%; and if this Bill is passed, R27 000, or 9%. Therefore, even on an estate of R300 000, estate duty will be only 9% under these circumstances, while it was almost 36% when the NP Government took over in 1948. I am just pointing to this to indicate once again that since the NP Government came into power, it has brought considerable relief over the years.

†The hon. member for Mooi River supported the Bill, and I am very grateful for that. He raised a matter about sectional title concessions involving the farming community. I think that that concession will, in practice, prove to be quite a valuable one. It will even mean that some of our more affluent farmers who have town houses or flats or whatever on sectional title can derive some benefit, and one is only too pleased that that will be the case.

The hon. member for Walmer raised one or two technical matters, e.g. the extension of the period beyond 1981. We shall look into that again. These matters are under constant review and we shall bear in mind the point he has made.

The hon. member for Constantia also raised a fairly technical matter in relation to the capitalization pensions. We shall immediately look closely into that and, if necessary, discuss the matter further with him. He is correct—he has raised this whole matter earlier—that it was certainly partly due to his representations that we gave this matter further consideration. I am glad we were at least able to bring it as far as we have.

I think that is as far as I want to go now. About the very last issue I raised we shall no doubt talk a little more when the hon. member for Yeoville raises it again during the Committee Stage.

Question agreed to.

Bill read a Second Time.

Committee Stage

Clause 3:

Mr. Chairman, I move as an amendment—

Having already motivated the amendment I am awaiting the hon. the Minister’s reaction to it.

Mr. Chairman, I have a little difficulty with the amendment. First of all, at the risk of a little repetition, may I just read a note which I have before me and which refers to the difference, as we see it, between the capitalization of pensions and the capitalization of income from a retirement annuity fund, and then the inclusion of that into the net value of an estate.

On clause 3 there is an amendment, and I want to say that the effect of my amendment is to exclude from property, which is deemed to be property, so much of the capitalized value of an annuity payable by a pension fund, which has been approved for income tax purposes, on, or as the result of, the death of the deceased. Usually this means that the value of a pension which becomes payable to a widow on the death of her husband is included in the property found in her husband’s estate.

The question may well be raised about why this exclusion is not being extended to the value of annuities payable by a retirement annuity fund upon the death of a member. I apologize for some repetition, but I believe I have to state this again. An attempt has been made to anticipate this question and various arguments in support of the distinction being made between pension funds and retirement annuity funds were put forward in my Second Reading speech. Those arguments, with the addition of one or two others, I should now like to set out briefly.

First of all, membership of the pension fund is compulsory, which means that the employee has no discretion in the matter. The employer recovers the employee’s contributions from the latter’s pay, adds his own contribution and pays the combined amount over to the fund. In the fullness of time an annuity becomes payable to the member or to his dependants.

A self-employed person does have a discretion. He may decide to enjoy his money now, or he may decide to join a retirement annuity fund. If he does so decide, he can shop around and join the fund which suits his purpose best. Secondly, employers as well as employees contribute to pension funds. Sometimes the employer contributes very generously, and he may even bear all the contributions. A pension which eventually becomes payable to a retired employee or to his dependants is therefore not solely the product of the employee’s own thrift. Had he been able to bank the equivalent of his own contributions instead of paying them into the pension fund, his estate would not have been swelled to the extent of the capitalized value of the pension payable to his widow.

The annuity payable by a retirement annuity fund is, however, the product of the taxpayer’s own savings. Had he, instead of joining the retirement fund, deposited each month an amount equal to his contribution to the fund, he would have had in the bank, together with accrued interests, at least as much as the capitalized value of the annuity payable to his widow upon his death.

Thirdly, most retirement annuity funds are underwritten by insurance companies, and the amount which becomes available for the purchase of an annuity is, as indicated, the product of the member’s contributions only. By way of contrast, some established pension funds are very wealthy and are capable of paying annuities in excess of those normally based solely on the employer’s and the employee’s own contributions. Fourthly, where a member of a retirement annuity fund retires and receives a pension and then, after a period of time, dies, the annuity which his widow receives is normally a continuation of his own annuity. In other words, the widow steps into her husband’s shoes. Clearly there is a valuable asset passing as a result of the husband’s death. The position of pension funds is usually different, for the widow normally becomes entitled to an annuity in her own right in terms of the rules of the fund. She is not, therefore, the successor to her late husband’s pension. That pension would normally die with him.

I should just like to add—I think this has relevance to the point made by the hon. member for Constantia—that as these retirement annuity funds need have no limit, even in excess of income tax contributions, should a testator wish to use it as a means of limiting his estate duty, it will require further consideration to see whether it is in fact on all fours with the pension fund—as, I think, was alleged—or whether limitations should be placed on it. We will go into that particular matter as soon as possible. We should also like to consult with the Life Offices’ Association, and if necessary also with the Advisory Committee on Long-term Life Insurance.

I do not want to be dogmatic. We all know that things change. Some of the concessions made in this latest legislation would no doubt have been turned down some years ago, or at least the extent to which changes have been made. I ask the hon. member for Yeoville for more time so that I can look more thoroughly into his proposal. For the reasons I have given, I have some difficulty in accepting it right now.

Mr. Chairman, I want to tell the hon. the Minister that I am pleased that he is at least going to consider that proposal. I also indicated to him that I had apologized for his not having received my amendment earlier, but I did warn the Secretary of the Department, through one of his senior officials, to alert the hon. the Minister that I would raise this point in the debate when it came up for discussion.

However, let me deal specifically with the issues which the hon. the Minister raised. Perhaps, in passing, I might also deal with what the hon. member for Losberg said. I am concerned here with the question of incentives to the self-employed. There is to my mind, as I have tried to indicate, not very much difference between the professional man who practises without incorporation and the professional man who practises with incorporation. It seems to me wrong that there should be a benefit on the death of the one when there is no such benefit in the case of the death of the other. Therefore that seemed to me—and still does—to be a valid point which, with respect, neither the hon. the Minister nor the hon. member for Losberg tried to answer. In point of fact, I do not think there is any answer to it, because the self-employed person should be encouraged to save for his old age and to provide for a pension in exactly the same way as a person who happens to have incorporated his practice and therefore will receive the same kind of benefit.

The second point I want to raise is that the membership of a pension fund being compulsory merely means that one is a saver who is compelled to save. The act of voluntary saving is a far more difficult one in a community than the act of compulsory saving, as I think every hon. member of the House will know. So one should encourage the voluntary saver more than the compulsory saver, because the compulsory saver has no choice in any case. Therefore, to penalize the voluntary saver, as opposed to the compulsory saver, seems to me to be illogical. It should really be the other way around, and I therefore fail to see the argument put forward in the memorandum that the hon. the Minister quoted. I cannot see why one should get a benefit when one is compelled to save, yet no benefit when one saves voluntarily.

I now want to turn to the argument that an employer’s contribution is made to a pension fund, whereas in the case of a self-employed person it is only he who makes a contribution. That, however, does not take cognizance of the fact that the self-employed person is both employee and employer. That is why, in terms of the provisions of the present Act, one is allowed a 15% contribution for retirement annuities and only 7½% for pensions, because the other 7½% is contributed by the employer. With great respect, that again is not an argument of substance in these circumstances. It must also be borne in mind that tax deductibility is in exactly the same proportion, i.e. 15% for the self-employed and only 7½% for the employed, because the employer is claiming a tax deduction, in his accounts, for the amount of the contribution that he makes towards the pension fund. The State, therefore, gets the 15% in any event unless, of course, it is solely funded by the employer’s pension scheme, in which case, of course, it is the whole amount contributed by the employer that is deducted.

I now come to the argument that insurance companies administer retirement annuity funds. Insurance companies also administer pension funds. Very many of these pension funds are administered by insurance companies. The fact that pension funds may be paying higher pensions, in some cases, than would be obtained from retirement annuity funds, is a counter-argument because there are greater exemptions and greater losses to the Exchequer from the pensions funds.

There is also the argument that a widow is not technically a successor. With great respect, in most pension schemes it is provided that when the employee retires he is obliged to elect to take a joint pension, in exactly the same way as, with a retirement annuity, he may elect to take a joint pension or only his own pension. So, to my mind, the same principles apply in both sets of circumstances. There seems to me to be no distinction, and any distinction which is sought to be drawn is, to my mind, an artificially drawn one. I am putting these arguments to the hon. the Minister, not because I think that he will suddenly change his mind here in the House, but because he did indicate that he was going to consider the matter further, and I therefore think that it is important for these matters to be on record when consideration is given to this proposal.

Mr. Chairman, there is one thing which the hon. member for Yeoville is losing sight of, and that is that as far as a pension fund is concerned, the pension is linked to the salary and that the contributions to the pension fund make up a specific proportion of the salary which the person earns, while in the case of an annuity fund, although as regards tax concessions, a limit of 15%, up to a maximum of R3 500, is imposed on the contribution, he can invest 95% of his income in an annuity fund in order to build up an estate which would be excluded from estate duty. We are concerned here with estate duty and with the size of the estate, and if there is no restriction on the annuity funds, then he is placed in a very favourable position in respect of estate duty as such, in contrast to the person who is a member of a pension fund, who is limited as to the pension he can earn on his salary.

Mr. Chairman, I thank hon. members for this discussion. It has been a useful discussion and I have taken note of all the arguments. One of my problems is that if I were to make another concession under this Bill, I would be left with almost nothing. Therefore I have to be a little careful. I will, however, investigate the matter thoroughly. I need a little more time, and we can then discuss this matter again as soon as possible. This does not, of course, mean only a technical change in the wording of the Bill, but also that we must be completely convinced of the philosophy involved here. Therefore I want just a little more time to investigate this.

Amendment negatived (Official Opposition dissenting).

Clause agreed to.

Clause 8:

Mr. Chairman, I want to come back to the question of the duty which is payable upon the transfer of shares, and I specifically want to draw the hon. the Minister’s attention to the fact that I am not talking about shares which go through the Stock Exchange, but purely about shares which are sold outside of the Stock Exchange, where the marketable securities tax is not paid and where at present the tax is paid on the sale of the shares. All I am suggesting to the hon. the Minister is that he should give attention to the fact that duty should become payable on transfer and not on sale, in order to remove the abuses and problems which exist in that regard.

Mr. Chairman, the hon. member has made his position quite clear and I shall reconsider that matter as well. I cannot make any commitment now, but I am quite clear on what the hon. member has in mind.

Clause agreed to.

House Resumed:

Bill reported without amendment.

Bill read a Third Time.

Mr. Speaker, I move—

The turmoil surrounding the former Department of Information has for a considerable time now been the subject of intensive investigations and debates in this House and elsewhere. The matter was investigated in depth by a judicial commission of inquiry and the persons who had been involved and implicated in it were identified. However, there comes a stage at which any Administration—in fact, any nation—which has been struck by a disaster of this nature, must of necessity turn its back on it and look to the future. That time has now arrived for this Government and this nation. My feeling is that it is a heartfelt desire on the part of all responsible hon. members of this House that we and our people should again be able to concentrate our energy and strength fully on the great challenges and problems which our country has to contend with.

When I say this, Mr. Speaker, I do not mean that we should forget the lessons to be learned from this episode, or that the law should not be allowed to take its course, or that the final salvage work should not be disposed of properly. This will be proceeded with. In fact, this Bill, as well as the Bill on the State Trust Board and the one relating to the office of Advocate-General, contain measures to this effect. What I mean, however, is that the shock which the disclosures caused in our national life should now be shaken off, and that in particular the episode should not be allowed to dominate the true political debate in this country and the consideration of important matters of policy any further.

In an important sense it is consequently the object of this Bill to help bring this chapter in our history to a final close. With this object in mind it is necessary, from a financial and administrative point of view, for Parliament, and therefore this House, to take two steps.

Firstly, with a view to the future, this House is being requested to authorize the creation of a special account for secret information services on the same basis on which similar accounts already exist for other secret services. In this way essential covert projects of the new Information Service of South Africa which cannot be defrayed from its ordinary Vote may in future be continued under the clear and specific sanction, directives and restrictions of Parliament.

Secondly, this House is now being requested to deal with the extra-legal actions of the past and to get them finally and formally settled. In this connection this House is aware that State moneys were from time to time made available to the former Department of Information without covering Parliamentary appropriations, as required by sections 2 and 4 of the Exchequer and Audit Act read in conjunction with section 98 of the Constitution Act, having existed for that purpose. Hon. members will observe that the House is not being asked to appropriate these amounts retrospectively. In view of the way in which a portion of these moneys were ultimately applied, hon. members are not being asked to do this and in that way perhaps sanction or condone these actions by implication. The House is being asked to approve of these moneys being deemed to have been appropriated, so that this aspect of the matter may then technically be considered to have been disposed of. If this legal and financial instrument is not utilized in this way, the irregularity will technically continue to exist and it will not be possible to say that this House was finally afforded a proper opportunity to deal with and in fact dispose of the matter formally.

However, the amounts of money to which I have just referred were not only channelled to the former Department of Information without Parliamentary appropriation, but were also expended by the Department without Parliamentary authority. Similarly, as far as this second leg of the irregularities is concerned, these matters may only be finalized and disposed of by Parliament by means of appropriate statutory provisions. Here, too, hon. members will understand that I do not feel myself at liberty to ask the House to approve, authorize or condone the unauthorized expenditure. All I am asking this House to do, therefore, is to approve of what has been done being accepted statutorily as a fait accompli, so that the matter may now finally be closed.

The Bill therefore provides that expenditure incurred by the former Department of Information from its secret funds shall finally constitute a charge against such funds, which shall also be deemed to have been appropriated. I repeat: This measure should not be seen as condoning, authorizing or assenting to what happened. It is merely an instrument by means of which Parliament has to deal technically with the matter in order to get it out of our system.

Naturally it is not the intention of the Government to exonerate persons who harmed the State through their actions and misdeeds from any criminal or civil liability. On the contrary. The Bill makes specific provision for that. The law must take its course, and the Government has for a long time now been doing everything in its power to safeguard the financial interests of the State and to recover all amounts and recoupments to which it is legally entitled. This process will continue.

The House is aware that the Government has, since 1 July 1978, being salvaging the affairs of the former Department of Information. Covering statutory recognition is now being given in the Bill to the steps that have been taken in this connection, inter alia, in respect of settlements that have been negotiated and assets and rights that have been secured. In addition provision is being made for the further ratification of contracts which may be necessary on the recommendation of the State Trust Board.

As far as the progress being made with the clearing up of the projects of the former Department of Information is concerned, I can inform this House that the latest information which I have at my disposal—as at 15 June—indicates that just over R29,l million has been recovered or is recoverable. The particulars are as follows:

Apart from this amount there are also various properties that are registered in the name of the State. Of the amount of R29,1 million, however, an amount of R4 898 074 had to be employed in the interim for the operation of certain projects.

I think it is appropriate that I express my thanks on behalf of the Government for the work done by the Pretorius Committee and others in this connection. We know that the State Trust Board will continue with the good work, and I trust that it will be possible to make further recoupments.

Mr. Speaker, we have been sailing in very tranquil waters all day. It is with some regret therefore that I think we must leave those tranquil waters and enter upon the stormy seas of the Department of Information. So that there should be no misunderstanding about our attitude right from the beginning, I want to indicate that we intend moving an amendment and I want to give the hon. the Minister immediate notice of what that amendment will be. Therefore I move as an amendment—

1. (1) there is still insufficient public knowledge of the affairs of the former Department of Information to enable Parliament to judge whether funds obtained by that Department should be retained in the new account or whether the Minister should have power to ratify its contracts; and
2. (2) no satisfactory explanation has been given of the manner in which moneys voted by Parliament for the Department of Defence or the Department of National Security were transferred, contrary to law, to the former Department of Information, and no justification therefore exists for validating these transfers.”.

Let me say immediately that to my mind this measure is completely premature, because neither this House nor the country is in possession of all the information which it is entitled to receive in regard to the Information scandal. When it came to the question of creating a State Trust Board, in order to enforce the rights of the State and to recover its money, that measure immediately had our support. When it comes to a question, however, of what amounts to—whether the hon. the Minister wants to use those words or not—a ratification, or a closing of a chapter, we feel that one can only ask for it when the House and the country as a whole have been taken into the confidence of the Government and the full facts have been put before them.

Let us look at the facts as they are. At this moment of time not one single person has been prosecuted in regard to the affairs of the Department of Information, with the exception of people connected with the Rand Daily Mail who were alleged to have contravened a sub judice rule. With that exception, not one single person in the whole of South Africa has been prosecuted, although there has been a scandal of unparalleled proportions in the history of our country. To this day no balance sheet has been presented by the Government setting out what the assets and the liabilities in this Information debacle are, and the hon. the Minister’s words in this speech were the first remote indication of this. We have not been told fully what assets the secret funds of the erstwhile Department of Information bought. We do not know what all the assets are, and if this measure is passed, we shall never know what all these assets are. Do we know what the liabilities are? Do we know what the obligations are? Do we know what money the State owes? Do we know any of these things? No. What we do know, however, is that some aspects of it have been investigated by the Erasmus Commission. The commission itself states the following, in no uncertain terms, and I quote from paragraph 4.50—

Then paragraph 4.54—

In other passages of this report the commission indicates that it relied upon rumours, newspaper reports and a variety of other things in order to decide what to investigate, but by its own admission, and by the Government’s own admission, the affairs of the former Department of Information have, to this day, not been fully investigated. Nobody should, with great respect therefore have the nerve, to come to this House and to ask for this kind of power while the affairs of the former Department of Information have not been fully investigated, and we have not been told what assets have been recovered in full, and when we are not told what further potential claims can amount to, though we do know we are dealing with an amount of money well in excess of R64 million. In spite of all this, we are told by the hon. the Minister that, including bills on hand, he has R29 million. What has happened to the rest of the money?

Let us take, for example, the picture of the innocent man sitting in his home who now hears on SATV that a business, in which he thinks a 50% share was bought by money supplied by the Government—I am referring to UPITV—has been bought by Independent Television of Britain. But, Sir, who bought it from whom and for what? It was our money. It seems that 50% of a business we financed and which belongs to us has now been sold to somebody else. What is really the position? We are not told about this.

Let me refer to another example. Who owns the Sacramento Union? Is it included in the assets that somebody is going to ratify it that the Sacramento Union can be given as a present to Mr. McGoff? Have we never owned it? Do we own it? What is the real situation? We are asked here to give a completely blank cheque in regard to assets and in regard to the admission of liability in order to realize the wish, piously expressed— and, I believe, seriously expressed by the hon. the Minister—that this thing should come to an end. Certainly it should come to an end, but it can only come to an end when the public of South Africa is told what this is all about. We cannot be fobbed off by the few things that have been investigated while we do not know what the real situation is.

Let me give another example. As far as we of the PFP are concerned, we disapprove completely and utterly of the manner in which The Citizen was dealt with. The Citizen, so it is said, now has a new board and is going to make a public issue of shares, debentures, convertibles, or something or the other. We are being told that that now belongs to somebody else. Will the hon. the Minister tell us who built up the circulation of that newspaper? It was the taxpayers’ money that was used to build up the circulation of a newspaper which was illegally conceived, which was born in circumstances which, to our minds, are utterly reprehensible, and which is then disposed of without tenders being called for. What happened? The shares in SA. Today were abandoned to a man called Van Zyl Alberts who is lambasted from head to toe in the last report of the Erasmus Commission. Yet we are expected today to say in this House: “Yes, we will agree that whatever you did is fine.” No, Sir, we do not agree that what has happened is fine, nor do the public. As far as The Citizen is concerned, the disposal of that newspaper is an act of this Government under the present Prime Minister with the present Cabinet’s responsibility, and nobody else can be given the blame for it. That is the true fact in regard to The Citizen.

Let us take the case of To The Point. We are given what I can only call a cock-and-bull story in the Erasmus Commission’s report about millions and millions of rand which are allegedly being spent on buying extra copies of To The Point. Who really owns To The Point? How did it come about that that financing took place? Without knowing those facts, we are expected today to say: “Yes, it is fine; let us forget it all; let us deal with it all as though it had never really happened. We will now try to forget all about this terrible episode in our history.” Sir, it is not as easy as that. It cannot be disposed of as simply as that.

It will not go away.

Then let me very pertinently ask the question: Is it actually necessary to have a separate secret account for the Department of Information or for the Information Service of South Africa? We in these benches have made our attitude very clear. We accept that it may be necessary to engage in secret activities—every State must—but I want to say that, if one really wants to further South Africa’s cause in the information field, why not do the following: Make the kind of public utterances Dr. Koornhof made in Washington; and then come back to the House and implement what was said. If one does that, one can sell South Africa, one can sell its image. One will not achieve those results by owning Sacramento Unions, by owning or trying to own the Washington Star and by having secret newspapers in South Africa. None of those things can sell South Africa’s image. South Africa’s image can best be sold by openly stating the policies, stating realistic policies which can in fact solve South Africa’s problems, and then implementing those policies. Under those circumstances one can sell South Africa properly and adequately.

You are preaching to the converted.

The hon. the Minister has, in the course of his speech, gone to some lengths to say—I do not want to misquote him in any way, and therefore I shall use his exact words—

I respect the hon. the Minister’s sentiments but let us look at what the Bill actually provides. Clause 6 provides—

What does that mean? It means nothing more nor less than that it is now deemed to have been appropriated; in other words, that it is as if it had been appropriated in the first place, and if that is not ratification, I do not know what is. With great respect, we cannot approve of this type of legislation, in these circumstances, without knowing all the facts.

It is my submission to the hon. the Minister that this is a Bill which he should not have come with now. He should have held back this Bill until he was in a position to tell us exactly what the assets and liabilities were, what had to be written off and what had to be done.

In the light of what has happened, in the light of the whole history of the Information scandal, the hon. the Minister cannot expect this House to give him or the Minister responsible for the Information Service of South Africa the power either to ratify any contract that has been concluded, or to dispose of assets in this form. He cannot expect this of us when we have already had the disposal of The Citizen and its transference into the hands of the very people who will put forward the same kind of purpose for which The Citizen was created. How can the hon. the Minister expect us, in these circumstances and without having all the facts before us, to give this kind of authority to a Minister or to the Government?

I want to touch very briefly on the whole question of what this House is being asked to do in terms of clause 6. In this House hon. members sat as individuals and heard the hon. the Minister of Finance present his budget. We also heard other hon. Ministers present their Votes. We all heard the public being told that we need more money for Defence. What happened? When this House and South Africa were prepared to make the necessary sacrifices by making money available for the defence of South Africa, unbeknown to us, included in the money we were voting for Defence were moneys which were going into the sticky hands of Dr. Rhoodie so that he could indulge in the kind of activities which he should not have indulged in and which we disapprove of. That is what took place. We in this House were asked to vote that money.

When I and other hon. members got up in this House and challenged hon. members sitting on that side by telling them that they could not transfer money from one Vote to another, we were told that no money was being transferred from one Vote to another. We were told that all those allegations were of no substance. We said that in terms of the Exchequer and Audit Act money could not be transferred from one Vote to another, and we asked how the money had got into the hands of the Department of Information and some officials dirty, sticky fingers. We then found ourselves bona fide voting money for one purpose, whilst it was being used for another purpose. Those are the facts.

What happened? When the first report of the Erasmus Commission was presented, we were told in paragraph 10.318—

So, the question that this was—contrary to what hon. members opposite had been saying —illegal and an irregularity, was established even by the Erasmus Commission. However, it goes one further. In terms of the Special Defence Account Act a certificate has to be furnished. A certificate has to be furnished stating that that money has in fact been spent in accordance with the provisions of that Act. We can look at audit report after audit report, and those certificates were furnished. However, what was the reality of the situation? Are we now also approving the fact that certificates were furnished stating that money had been spent in regard of defence matters, when we all know it was not spent in connection with defence matters? Surely, the hon. the Minister cannot expect us to do this in these particular circumstances. That he surely cannot ask us to do.

We have the spectacle—a spectacle which is even proved in the report of the Erasmus Commission—that even senior public servants, very senior public servants, wrote letters in which they said: “You cannot expect my Minister to tell untruths to the House. You cannot expect my Minister to say that this money was spent in connection with defence matters when, in fact, it was not the case.”

Today we see the situation in which, many months later, a completely different picture is presented to us. Now we have the situation in which it is admitted that this procedure was illegal; the situation in which it is admitted that this money should never have been transferred from one Vote to another. Without knowing all the facts, we are now told that we simply have to close the book and forget all about it. With great respect, we cannot close this book until we have read all the pages. We cannot close this book until we know on what we are closing it. We in the PFP demand, on behalf of the public of South Africa, that we will deal with this measure when we know the facts, when the public knows the facts, when there is a balance sheet presented and when we can tell the public exactly what the situation is and what the facts are. Then we can agree to closing the book and to starting again.

Mr. Speaker, today for the umpteenth time we are back to a debate on the former Department of Information. I believe that the legislation we are dealing with at present is one of those Bills by means of which we are already attempting to dispose of the affairs of the former Department of Information. I believe, therefore, that it will be senseless to keep asking questions about what has been done with this, that or the other, or what has become of this, that or the other, etc.

Have you read the book? [Interjections.]

The Erasmus Commission has submitted its report. An Advocate-General is being appointed to deal with certain other matters. The Pretorius Commission is engaged in its activities. The Van der Walt Commission, too, is still engaged in its activities. Activities in this regard are therefore still in progress over a wide field. Even this House has appointed a Select Committee to inquire into making evidence available.

The legislation before the House deals with one important aspect, i.e. with how the money was transferred from one department to the other in a way in which it should not have occurred, and what the House can do to prevent this from happening in future. It is a fact that the money flowed from one department to another. Because it is a fact and i because the moneys dealt with in this way were secret funds, we should look at what has been done with regard to the whole issue of secret funds. This legislation recognizes the basic secret account of the Special Defence Account, of the Department of Foreign Affairs and of the Department of State Security. The secret accounts are recognized and legislation has been introduced so that those secret accounts can be audited.

We created a new secret account last year which will fall under the control of the Treasury, a secret account from which funds may flow to the other secret accounts. Now we are also creating a secret account for the Information Service of South Africa by means of this legislation. The picture is now complete. All the departments which have to make use of secret accounts, now have secret accounts. There is now also a channel through which the money can flow into those accounts in a proper way, because the problem existed that when the Government decided that the former Department of Information should have a secret account, they found that they were unable to place large amounts of money on the account of the department, because such a secret account did not exist. The secret accounts of the Departments of Foreign Affairs and State Security were used for this purpose, but as the amounts increased, it also became impossible to canalize the funds through the two accounts I mentioned. The only other method for canalizing the money into the former Department of Information, was by means of the Special Defence Account.

I readily concede that that was a mistake, but the argument which was used at the time for doing it that way, was on the basis that in fact we in South Africa regarded the money spent by the former Department of Information as also being money for a Defence effort, and that is why it was possible to budget separately on the Special Defence Account for funds which eventually had to go to the Department of Information. I concede that that was an incorrect method. We eventually made an error of judgment by doing it in this way, but now this legislation places the whole matter in the correct perspective. The machinery is now being created to allow secret funds to flow, to be assessed and to be audited.

It is true that there is another aspect of this legislation and it also has a bearing on legislation such as the Advocate-General Bill and other legislation. Certain things will now have to be done to secure the interests of South Africa. We have just been dealing with the question whether there were secret accounts from which funds could be drawn for that purpose and what the pipeline method was to get funds go to the right places.

Other efforts are now under way to establish what happened to that money when it arrived at the final destination. It was a part of the terms of reference of Mr. Justice Erasmus to establish whether the money had arrived at the final destination and whether the funds had been used correctly. The Van der Walt Commission will probably report on aspects of this. The Advocate-General who is to be appointed, could always investigate to see whether the money has been wrongly used. The Pretorius Committee dealt with the question of what had happened to the money. We have said in this House, and the present hon. Minister of Foreign Affairs has also said in this House, that many secret projects are being continued, in other words, the work is continuing. We are only concerned about those secret projects where malpractices could arise and where South Africa has really lost money. We are not aiming to expose all the other secret projects in regard to which we are certain that we have no problem. That is not the object of the legislation before the House at present.

This legislation should enable us to rectify what was wrong. It should enable us to balance the country’s books where the books did not balance before. By means of this legislation, everybody possessing its own secret funds will now be in a position to work with its own set of secret books. That will ensure that there will no longer be any possibility that funds can become mixed up.

It is provided in the legislation that when a body which deals with secret funds abroad gets to the end of the financial year, it will no longer be necessary for those funds to be repaid to the Exchequer. It provides that the funds can remain there and that they can be used there. These are all things which will make matters far more streamlined. Since the legislation provides that secret funds will in future be transferable to the following year, they can accumulate and we shall not have to make a repayment to the Exchequer every time.

There are also steps contained in the legislation which I do not want to deal with in detail now, but which are in keeping with the recommendations in the Erasmus Commission’s report and are in keeping with the recommendations of the Information Service itself, as regards the control which they themselves want to exercise over their own funds.

We could have a big fight about the fact— that is the only thing which the Opposition can really dispute—that money went from one Vote to another. Hon. members could perhaps say that Ministers concerned issued certificates indicating that certain moneys were used for the purpose for which they were appropriated. It has already been made clear to hon. members that although certain moneys were appropriated for the Defence Account, those moneys were intended for operation “Senekal” and that specific method was adopted solely in order to get the money transferred. It was not meant to be used specifically for the Defence Force. It did appear in its budget, but it was earmarked for Information, through that account for the Department of State Security, which handled its administration. If we want to cut the throats of the Government, the hon. the Prime Minister and the hon. the Minister of Finance because of that technical situation, then I think we have decided on a very poor method. The circumstances prevailing at the time made it necessary and the people did it because they regarded it to be in the interest of South Africa.

It is a pity if some of that money fell into the hands of people who were not entitled to it. However, we must word our political guidelines completely differently. In these matters, when a Minister considers that something of this kind can be done, we cannot always seek to condemn this as necessarily constituting misspending or maladministration. If that were so then we on this side would have to judge every day whether, when the hon. member for Bezuidenhout wanted to do something, there was misspending or maladministration on his part.

Surely we are dealing with the human factors. One can judge on the basis of the information at one’s disposal and within the framework of the policy one is following. This Bill simply affords us the opportunity to complete our cleaning-up operation. Nothing could come out of this measure which would make it easier in any way for the Information Service of South Africa to play around with secret moneys in future. In fact, the procedure is spelt out very clearly in this Bill. I am wholly convinced that we should agree to this Bill. We are telling each other honestly that it happened and we are now attempting to rectify the matters. Let us continue with our effort to get South Africa into its stride in the second half of this year.

Mr. Speaker, for the umpteenth time I want to repeat what we in these benches have said—and I must do so in reaction to the speech of the hon. member for Schweizer-Reneke—and that is the old saying that patriotism is the last resort of the scoundrel. Once again we have heard the justification that the money was spent by the former Department of Information because of the onslaught against South Africa, in an effort to blunt the weapon of South Africa’s enemies and to put our own case. But was this the case in this affair? When one looks at what actually did happen with all the moneys that were handed to the Department of Information, one can ask the question: How much of those moneys were actually spent in the interests of South Africa and how much of those moneys were spent in the interests of the NP? [Interjections.]

You are a hater of the Boers.

Every time one brings up anything against the Government, the only thing they can say in excuse for their own sins, is “You are a hater of the Boers”. That is the biggest lot of nonsense that one can ever hope to put up with. The vast majority of the money handed to the former Department of Information was spent on propaganda for the NP in terms of the founding of The Citizen and To The Point. Neither of these matters has as yet been satisfactorily cleared up. We in these benches will also certainly not be supporting this Bill that is before the House today. Of course, our objections, like the hon. member for Yeoville’s objections, are principally in connection with clauses 6 and 7.

It is very interesting to read clause 6. I should like to refer to clause 6 as the “admission of guilt” clause, because that is precisely what it is. For the first time it formally admits on behalf of that Government and that Cabinet that their actions in taking this money and giving it to the former Department of Information were totally unauthorized and totally out of order. This is illustrated by the fact that they now have had to insert this type of clause in a Bill to authorize the expenditure of money which they allocated and misused from Votes of Parliament as far back as 1973. I say, therefore, that this is a clause which is nothing else but an admission of guilt clause.

We are quite prepared to have admission of guilt clauses, but in the case of an admission of guilt it is normal for the person who has offended to have to pay some penalty. In this instance no penalty is being paid; in fact, almost the reverse has happened. As I said in the debate on the Supplementary Report of the Erasmus Commission, there were two people who shared direct responsibility with Dr. Mulder and Adv. B. J. Vorster in regard to this whole ill-judged affair. Those two people are the present hon. Prime Minister and the present hon. Minister of Finance. [Interjections.] That is my opinion and I shall tell hon. members why it is my opinion.

Order! I am not going to allow a general discussion of the Information affair on this Bill. Anything any hon. member wishes to say must be founded on the Bill and be brought down to the basics of the Bill.

Thank you, Mr. Speaker. I have said that in terms of clause 6 we are seeking to authorize moneys that were voted in this House. I have said that the hon. the Prime Minister and the hon. the Minister of Finance share: direct responsibility. I believe that this clause is proof of the fact that that direct responsibility was concerned with actions which were taken illegally. Money was voted for the Department of Defence. The hon. the Prime Minister transferred it from the Special Defence Account to the Department of Information. That situation was administratively handled by the hon. the Minister of Finance. I do not think that he has ever attempted to deny that he knew that money was being taken from the Special Defence Account and put through for the use of the Department of Information. This has never been denied by the hon. the Minister, nor has it been denied that that hon. Minister was aware of the fact that what he was doing conflicted with the laws of this Parliament specifically in terms of the Defence Special Account Act of 1974 and the Exchequer and Audit Act. Therefore, this clause cannot possibly be accepted by us for the very reason that although guilt has been admitted, the penalty has not been paid. We maintain that those two hon. Ministers that I have mentioned have a direct responsibility in this regard.

Now you are being the old high priest!

At least I do not pretend to try and compete with the hon. member for Port Natal in terms of being a high priest.

The second clause which we find particularly difficult is clause 7, and particularly clause 7(1)(b) and (c). Clause 7(l)(b) states that—

Clause 7(1)(c) states that—

We believe that this clause should be called “The Citizen” clause, because this will put The Citizen newspaper finally and for ever beyond the reach of those people who have the real investment in The Citizen. Those people are the public of South Africa. This clause will validate the sale by the Government of The Citizen newspaper to Perskor, a sale which has indeed placed a big question mark against the great cry that we have for clean administration in South Africa. [Interjections.]

Once this Bill has gone through, we shall find that we, sitting in this House, have put the seal of approval on the whole action from the word go involved in the founding of The Citizen as a newspaper and the putting over of National Party propaganda throughout South Africa, paid for out of public money.

Tripe!

“Tripe”, says the hon. member for Simonstown! [Interjections.] We know perfectly well where the hon. member for Simonstown stands. In fact, I begrudge him the fact that he uses opposition time to speak in this House because he never speaks in opposition to any extent. As I have said, The Citizen newspaper put over NP propaganda and it was paid for by the funds of South African citizens, you and me. In clause 7 of this Bill the stage is reached where the sale of this paper, to keep it going as a newspaper in South Africa, under the control of a predominantly NP-supporting group, is being validated.

The hon. member for Yeoville has a long amendment to the Bill before the House, and we find nothing to disagree with in his amendment, but he appears to regard it more as a temporary measure. The two legs on which his amendment stands suggest, firstly, that there is still insufficient public knowledge of the affairs of the former Department of Information, and, secondly, that there has been no satisfactory explanation of the manner in which moneys voted by Parliament for the Department of Defence were transferred, contrary to the law, to the former Department of Information. Obviously there has not been a satisfactory explanation, because there cannot be one. If there could have been a satisfactory explanation, we would have had it a long, long time ago. We believe that the amendment that we move— we do not move it lightly—is an amendment which takes more than just these two items into consideration. As I have said, it should take into consideration the fact that, as we in these benches believe, there are two more Ministers that have to share direct responsibility, who have as yet shared no responsibility whatsoever. Therefore we move the following further amendment—

Mr. Speaker, it is very boring to listen time and again to an argument advanced repeatedly in this House on this whole Information affair. I want to state today that the hon. Opposition most probably have to come to the conclusion at this late stage of the session, that they have not profited from the whole Information affair to the extent they had thought they would. This legislation now offers them in the final instance an opportunity to see what capital they can make out of this affair for the last time. It is also very clear that the hon. member for East London North and the hon. member for Yeoville are outbidding each other in their competition to see who can derive the most political advantage out of this whole affair.

The hon. member for East London North said that the money spent was not spent in the interests of South Africa, but in the interests of the NP. In my opinion that is an absolutely ridiculous argument to advance, because it is of course true that the NP and the Government are indissolubly bound up with each other. Accordingly it is, after all, the NP that governs. When this Government does things which are to the advantage of this country, then there is surely a subjective element concerned in the spending in so far as the Government is subjectively involved in it. To say now that moneys spent were spent in the interests of the National Party, is ridiculous.

Mr. Speaker, may I ask the hon. member a question?

No, Sir, the hon. member can make a speech later if he wants to. [Interjections.] The hon. member for East London North said that clause 6 “is an admission of guilt”. This is again a further onslaught on the hon. the Prime Minister and the hon. the Minister of Finance. Have we not conducted this debate repeatedly? Has it not been proven repeatedly by three reports of the Erasmus Commission that the hon. the Prime Minister and the hon. the Minister of Finance were not involved? I do not want to repeat this whole argument today, but it is clear to me that the Opposition does not have anything meaningful to say and that is why it is raising this matter again.

The hon. member for Schweizer-Reneke asked what we had done, and he elaborated on all the various steps that had already been taken. More than this Government has done to clear up the whole matter can certainly hardly be expected of a Government.

I think the hon. member for Yeoville was very unreasonable when he stated that by means of this Bill we sought to close the book before we knew exactly what was going on. The hon. member said that we did not yet have enough information on the whole affair. He said that there was as yet no satisfactory explanation of moneys that had been spent. Why then did we get the reports of the Erasmus Commission, or does the Opposition reject totally what was submitted to us by the Erasmus Commission? I get the impression that hon. members opposite want to accept certain parts that suit them, while they do not want to accept those parts that do not. Nor is the hon. member for Yeoville entirely consistent in his argument, because he himself admitted that they had supported the establishment of the State Trust Board. However, they opposed this Bill. What is the purpose of the State Trust Board? In terms of clause 7 we are in fact using the State Trust Board created by us, to validate certain contracts— the hon. the Minister of Foreign Affairs has repeatedly explained why they had to be proceeded with.

The hon. member for Yeoville went on to say that we should take the country into our confidence. But is there not a commission that will institute an investigation and evaluate the evidence, a commission in which they too will participate? Is it not true that after the commission has published its report, the evidence will be submitted to the nation? The hon. member for Yeoville went on to say that no one had yet been prosecuted. But surely the Police are already dealing with this, and surely the hon. member knows that certain investigations are being conducted? The hon. member for Yeoville also said that no balance sheet had been submitted to the nation. However, this very Bill will enable us to draw up an account of appropriated money. In terms of clause 6, therefore, we shall place the appropriated money that the Department of Information had at its disposal on the credit side, and all expenditure on the debit side. Surely we will then get a clear picture. Surely this is what we are engaged in.

In addition, it has been alleged that a full investigation has not been instituted into the R64 million that was spent. Does the hon. member want to negate the announcement by the hon. the Minister that R29,1 million had been reclaimed? Does he want to denigrate that? Surely it is clear that however well or badly the department functioned, some of those amounts out of that total must certainly have been used effectively. Surely we cannot say, therefore, that R64 million has been lost. I think the department has done very well to succeed in reclaiming such an amount.

The question has been asked by the hon. member for Yeoville whether a secret fund is necessary for the Information Service of South Africa. In his amendment, however, the hon. member admits that there have to be secret funds. He is now asking whether they are specifically necessary for Information. He knows just as well as I do that they are. A good friend of mine in the outside world told me personally that I should not send him official documents of the Department of Information, because if he wants to use them to put South Africa’s case, he is told: “Oh well, it is an official document; it is official propaganda of the South African Government.” It is simply necessary for one to do a great deal of this information work in the outside world on a secret basis. Owing to the tremendous prejudice existing in the outside world against South Africa, it is necessary for one to utilize certain amounts of the money on a secret basis.

What do we envisage with this legislation? Fundamentally, we envisage the establishment of a secret account to enable us to distinguish administratively between normal and secret funds. In terms of clauses 1, 2 and 3 we provide for an administrative arrangement in respect of the funds. That is fundamentally what the first three clauses are concerned with. They stipulate how the money is to be utilized. Clause 4 provides that unexpended balances in the accounts are to be carried over to the following financial year. This is completely in accordance with the procedure in another department, the Department of Defence, when dealing with long-term contracts for which funds are transferred.

Furthermore there is the contentious clause 6 that I have already discussed. We say that the account will be audited. This is fully in accordance with what we discussed this morning in the course of another debate. I think it ought to satisfy the Opposition and this country that there is to be a proper audit.

I want to quote clause 8—

The hon. members opposite and the hon. member for Yeoville in particular stated that we were now seeking to draw a veil over what happened in the past, but the Bill specifically provides that we should not do so. The Bill makes provision for people to retain their responsibility. Clause 9 also contains provisions in this regard. It will still be possible for people who have erred to be brought to book as we are in fact doing.

I think we in South Africa have done enough in the interests of South Africa for us not to have to waste our time any longer. The other day it was said from Opposition benches that we should bring the Information story to an end. However, when we want to create the opportunity to bring the Information affair to an end, the Opposition makes it difficult for us to do just that.

Mr. Speaker, the hon. member for Yeoville stated the standpoint of hon. members on this side of the House briefly but very forcefully. At this late stage of the session I do not want to repeat any arguments. Owing to my earlier absence I was only able to study the Bill for the first time this morning. For that reason I should just like to add a few ideas to the explanations that have been given so far as to why we oppose this Bill.

It goes without saying that the Information Service of South Africa at times has to deal with sensitive tasks, tasks that cannot be publicized.

Do not tell me you realize that.

This is nothing unusual in international politics. Consequently we do not reject per se the institution of a special account for the Information Service. Indeed, there is one for the Department of Foreign Affairs too, as well as one for the Departments of Defence and National Security.

What does Harry say?

I agree entirely with the hon. member for Yeoville, when he says that it would be a mistake to think that this alone will be our salvation as far as our problems with regard to the outside world were concerned. It is right and in order that the special account for the Information Service is to be inspected and audited by the watchdog of Parliament, the Auditor-General, and that this important provision is now being inserted in the Bill. It is also as well that the Minister in control of the Information Service will in future require the positive consent of the hon. the Minister of Finance before money from the special account can be used. The hon. the Minister of Finance has a special responsibility in the Cabinet, and to all members of the Cabinet. In my opinion, this excludes the possibility of one Minister, as it were, taking decisions on his own and not informing other hon. Ministers what expenditure must be treated as highly confidential in future.

I must say that I do not like the term “Secret Services”. “Secret Services”, particularly when related, in legislation, to our Department of Foreign Affairs and our Information Service is, I believe, not the proper term. It has a flavour of espionage. I do not want to say that I can think of a better term. I nevertheless want to recommend to the hon. the Minister that he give attention to this. Perhaps the hon. the Minister would be prepared to reconsider this term. I think we should try to avoid using the term “Secret Services”, particularly when dealing with legislation relating to Foreign Affairs and the Information Service of South Africa. I think that in legislation of that nature, it would be better to give it another name. After all, it does concern matters of a highly confidential nature, matters such as these with which in fact every other business undertaking deals.

In the systems of dictatorship, closed government is the rule. We all prefer a form of open government, that form of open government which is characteristic of democracies. However, there are matters and activities in regard to which the democracies also have the right, and must have the right, to protect their national interests.

In the legislation before us an explanation is given of the purpose for which money from the special account may be utilized confidentially. I am pleased that it is clearly stated in the legislation. The purpose must be, as it stands now in the legislation, to promote the image of, and a positive disposition towards the Republic of South Africa, and to avert the psychological attacks on the Republic. In other words, it is clearly provided that the money used from the special account should not be used to promote interests of a political party, but to serve the interests of South Africa as such. I hope that lesson will now be impressed upon everyone involved in the Government of our country. I only hope that the responsible Ministers in this regard realize that there are attitudes that cannot be rectified with money. Ultimately it is the nature of the national policy and the Government’s actions, in the field of human rights and group rights in particular—since the two are related—that are decisive and can create a good image of and a favourable disposition towards South Africa.

I now want to refer to the provisions of clause 6. For the first time the Government is now coming to Parliament and admitting specifically that the things done under the Government of the former Prime Minister in respect of the utilization of secret funds for the former Department of Information was illegal, and that everyone who played a role in that, acted illegally. In fact, I want to go further by saying that they acted in conflict with the oath that a Minister has to take when accepting his duties as a member of the Executive Council. When an hon. member becomes a Minister, he must pledge solemnly to respect and uphold the Constitution and all other Law of the Republic. Here we now have for the first time the admission that offences were committed.

I understand that the hon. the Minister and the Government have a technical problem. They must now in some way regularize the illegalities committed. My only comment on that can be that I think that the hon. the Minister and even the most hard-bitten politician in this House will be reasonable enough to admit that it cannot be expected of the Opposition to, as it were, place its stamp of approval on what has happened. For that reason it is quite impossible for us on this side of the House to support the Bill, apart from the reasons mentioned by previous speakers and reflected clearly in the amendment. If we as the Opposition were to support this legislation, it would really feel as though we were engaged in a motion of confidence and gratitude to the former Prime Minister, Dr. Connie Mulder and Dr. Eschel Rhoodie. Because this is impossible for us, we must oppose this Bill.

Mr. Speaker, I do not think I can say much without being guilty of repetition, because this is a short Bill and hon. members on the opposite side of the House have set out the matter very clearly. Nevertheless I want to tell the hon. member for Bezuidenhout that what he said is diametrically opposed to what the hon. member for Yeoville said, because the hon. member for Bezuidenhout said there should be secret funds and that we could not broadcast all these matters. This is quite correct, but the hon. member for Yeoville demanded that there should be a balance sheet and a statement of the assets and liabilities of the secret account. He wanted to know what had happened in respect of every secret project that had been put into operation so far. Does the hon. member for Yeoville want to suggest that we should disclose such secret projects, which are in the interests of South Africa? Is that how his party wants to serve South Africa? I think the hon. member for Bezuidenhout displayed more wisdom by agreeing that the secret projects should not be broadcast.

The hon. member for East London North said that money had been utilized to make propaganda for the NP. I think the hon. member should realize what he is doing when he makes such an allegation. After all it is true that at all the by-elections that have been held since secret matters have no longer been relevant, the HNP almost made the grade, so weakly did the PFP and NRP fare. The hon. Opposition parties should be grateful that there was a Citizen, because at least it resulted in their emerging from the struggle in a stronger position.

The Bill before this House is not, as the hon. member for Bezuidenhout alleged, a rape of the Constitution. It is merely an administrative and technical matter that is being rectified, and that is to appropriate through Parliament beyond all doubt, where doubt existed, the moneys from the Special Defence Account that were utilized as secret funds.

I now want to ask a question about that money that was appropriated for the Special Defence Account of the Department of Defence. Can hon. members tell me what the definition of “defence expenditure” is? What can one specifically do with regard to defence? When one’s country is engaged in a way, a great deal of expenditure, which would never, under any circumstances, normally be regarded as defence expenditure, may be utilized. The psychological onslaught on South Africa and the struggle for a person’s soul…

Mr. Speaker, may I ask the hon. member whether he regards expenditure in respect of The Citizen as defence expenditure?

I am already dealing with the whole situation. [Interjections.] No, I am replying to the hon. member. A psychological onslaught is being made on South Africa, on the nation’s spirit and soul. In order to combat this onslaught, must one use an aeroplane or a cannon to kill the journalist concerned? There is only one method and that is to use a counter-measure on the same level in waging that war. If the English-speaking Press had not sold South Africa out it would not have been necessary to establish an English-speaking newspaper. That was one of the secret projects. I think the Opposition should not kick up such a fuss by condemning everything.

Of the R64 million that was spent in the course of seven years, R30 million has been recovered; in other words, a mere R34 million was spent. And, as I read the situation, there is more money that must still come back. To think that South Africa used only R34 million over a period of seven years to counteract the psychological onslaught on it, speaks volumes. I do not want fraud, I do not want theft, nor do I want things that are wrong, but as an accountant my whole life has been geared to exposing irregularities and to having people locked up. The hon. member for Yeoville’s career and my own go back a long way. In the days when I investigated Parity and had people locked up, the hon. member for Yeoville was one of those people working for Parity.

You were the one involved in it, not I.

Was I involved in Parity? … [Interjections.]

Order! I wonder whether the hon. member cannot simply leave those careers which go back such a long way alone?

As far as we are concerned, we want everything clean, correct and open. That is why I give the hon. the Minister my full support for this legislation he has now introduced to rectify matters where doubt exists, as though everything is not quite in order. Administratively speaking, there was a mistake. What should actually have happened at that stage was that those three or four senior officials of the former Department of Information should have been seconded to the Department of Defence to carry out those projects. In that case there would have been no error. Then it would have been correct. Initially it was a technical error that was made. Therefore, I want to ask this question: Is the Government not entitled to make one technical error? Surely it is neither superhuman nor perfect. Surely the Government can also make mistakes. How many mistakes did the United Party not make in its time when it was still governing? [Interjections.]

This is a short and excellent piece of legislation and we thank the hon. the Minister and the department for coming forward with it. I support the legislation.

Mr. Speaker, one has now probably heard the ultimate in attempted justification for the actions of the previous Minister of Information in starting The Citizen. That hon. member has absolutely no conscience or qualms whatsoever. As far as he is concerned, it was a loyal and patriotic act that was done on behalf of the people of South Africa. I challenge him to say whether he agrees with that statement or not. Was it in his opinion a loyal and patriotic act that was undertaken by the previous Minister to start The Citizen? Will the hon. member answer the question or not?

Do you still beat your wife?

Yes, when she needs it. [Interjections.] Will the hon. member now answer my question?

I have never beaten my wife.

If ever there was a man who is chicken from top to bottom, then it is that hon. member who has stood up and said that there was only one little “mistake made; such a little mistake made only once in the history of South Africa”. One almost feels as if he resents this Bill before the House. The hon. member for Newcastle has said that they are now bored with this whole story, but until those hon. members repent, we are entitled to continue our attacks and to move the sort of amendment we have moved. In the hearts of that hon. member and other hon. members, whose grumbling one could hear throughout the speech of the hon. member for East London North, there is no repentance whatsoever. Clauses 6 and 7 are seeking to bring the matter to finality. [Interjections.] This is an attempt to do so, and we concede that it has to be done. The matter has to be brought to finality. The books have to be balanced and the matter has to be written off somewhere, but the manner in which it is done, is something which we simply cannot support, because, as has been pointed out, clause 7(1)(c) is an absolute approval by this Parliament of the disposal of The Citizen, which was started with the taxpayers’ money and in which immense amounts were sunk. A miserable pittance was recovered. One of the groups supporting the Government was again the beneficiary. One cannot expect this party to say that it is all right and to agree because of the “totale aanslag teen Suid-Afrika” (total onslaught on South Africa).

The hon. member for Newcastle has said that this matter has become boring, but the people who are boring, are those hon. members when they talk about the “totale aanslag” as being the justification for everything the Government has ever done and will do. It is that Government which, by the sort of action it has taken, specifically in the case of The Citizen, has done more harm to South Africa than anything else and has aided and abetted the enemies of South Africa in the “totale aanslag” against us, because what was developing into a very useful instrument to be used on behalf of South Africa beyond our borders, and which could have developed into a very imaginative and bold programme to put our case in places where it should be put, has fallen into total disrepute because of the actions of hon. members on that side of the House, of the Cabinet Ministers and of the Secretary of the former Department of Information. Those hon. members will never again be able to talk to us about the “totale aanslag” and then pretend that they are people who are doing anything to help combat that “totale aanslag”. They have done more to lead South Africa into danger than anybody else.

You are part of that total onslaught.

That hon. member who goes on talking with that big mouth of his, will continue to do the same thing. If anybody is a part of the “totale aanslag” it is that hon. member, because he will not admit that what was done in that case, was done for the advantage of that political party and for no other reason. That hon. member appeared to attempt to justify the founding of a newspaper …

Mr. Speaker, may I put a question to the hon. member?

The hon. member has asked me one question and I have answered one, but then I asked him a question and he refused to answer it and therefore he must hold his peace. He must compose his soul, such as it is, in patience.

Do you not want to answer my question?

The hon. member has tried to justify this. The intention was simply that there should be an English-language newspaper in this country which would say the right things about the Government and which, in the entire network which was to have been established throughout the world, would then be reported as representing the real opinion of the people in South Africa. That is something we in this party will never support. For that reason we have moved an amendment which is a total rejection of the intention of this Bill. Even though the hon. the Minister is quite right in saying that he needs an account of some sort so that the work of the Information Service can continue, clauses 6 and 7 are of such an objectionable nature to us that we have moved our amendment.

Mr. Speaker, one is astounded when one hears how embittered people have become, in spite of what has been done and what is being done. One is also astounded that the Opposition listened so inattentively to what the hon. the Minister had to say in his Second Reading speech. The hon. the Minister explained in very plain language here what was being envisaged and also that they did not wish to cover up. I should like to quote the following extract by way of repetition, and then I should like to express a few thoughts on the matter. All three of the previous Opposition speakers either deliberately or inadvertently forgot about the short passage I am now going to quote. In his Second Reading speech the hon. the Minister said the following—

The hon. the Minister then had the following to say, and this is very important—

To my mind this is a very important sentence, for it is being alleged and speculated here that this Bill is merely another method on the part of the Government to effect a cover-up, or not to do what any upright hon. Minister ought to do.

The hon. member for Parktown was so kind as to give notice in yesterday’s Sunday Times of what his speech was going to be. He was interviewed by a Sunday Times correspondent, and one reads—

The article continues in that vein. I ask myself whether it is only the hon. members of the Opposition who are concerned about what happened, who are shocked and sorry about, and who feel hurt because of what happened. Is it only they who express this regret? Is it only they who are ostensibly so determined to clean up, to rectify, to punish transgressors and to recover the money? I should like to point out tonight that The Cape Times stated in an article early in December 1978—unfortunately I do not have it with me—that if there was one man in the National Party Government whose integrity and unimpeachability need never be doubted it was the hon. the Prime Minister, Mr. P. W. Botha. The Cape Times praised the hon. the Prime Minister for his unimpeachability and integrity. I should like to put a question to the hon. members of the Opposition. What happened, after all, happened before the present Prime Minister was appointed to this portfolio. What happened, surely happened before the hon. the Minister of Finance, Senator Horwood, had taken over the reins. They merely heard about it. It is important for me to know what they did when they heard about these things. What did the hon. the Minister of Defence do when he ascertained what method was being employed to transfer money to Information in an erroneous manner? Both the hon. the Prime Minister and the hon. the Minister of Finance took immediate action, they took certain steps.

I should like to put the following question to the hon. the member for Parktown, since it appears that he is going to be the next speaker and I trust he is going to answer me in all sincerity, for I have a high regard for his personal honour and integrity: Is the Opposition really in earnest about this matter being cleared up so that the Government can go ahead with what has to be done, or is the hon. Opposition, with all due respect, like a squirrel that buries acorns only to dig them up again from time to time to feed on, or like a little dog that, when a bone drops from a table, snatches it up, lies gnawing at it outside, then buries it and digs it up again to gnaw at it the next day, and the next? Is the hon. Opposition really sincere when they say today that they are prepared to co-operate with the Government to get the Information scandal out of our system once and for all?

There are very serious threats to the survival and civilization of South Africa and I do not hide the fact, since hon. members are aware of it. There are many dangers, both inside and outside South Africa which would also harm the hon. member for Parktown and his vast business interests if what I think he is aware of were to happen. Are there perhaps hon. members of the Opposition who are simply echoing the Press slavishly? Are there people on that side of the House who are being dictated to by the Press? Are there hon. members on that side of the House who are being held to ransom by the Press so that they have to keep on hammering away at a certain nail even though they may injure themselves in the process? This nail is very rusty, and if one tries to drive home a rusty nail with a hammer and, by accident, it cuts one’s hand, one sustains blood poisoning. I should like to use this metaphor to bring it home to the Opposition that they should take care not to sustain political blood poisoning themselves by persistently driving away at a rusty nail that should have been thrown away and buried a long time ago.

The hon. member for Yeoville said verbosely: “The Government wants us to forget. The Government wants us to close the book.” And he added in a challenging way: “… and we won’t close the book, unless we have read all the chapters”. The hon. member need not fear that the Government is going to conceal anything, because the nation from which it originates is one for whom I have a very high regard, it is one of which I am proud, but I want to tell him that it is a nation of which the personal honour has never been questioned. Where mistakes have been made and where people have transgressed, I should like to tell the Opposition: “Let us help the hon. the Prime Minister”, because the Opposition, too, has a high regard for our hon. Prime Minister, for his integrity, and will agree with me when I say that the hon. the Prime Minister would like to have this matter disposed of and get it behind us in the interests of South Africa.

I therefore maintain that we should rather consider the Bill to see what it envisages apart from clauses 6 and 7. Let us read clauses 1, 2, 3, 5, 8 and 9 and take cognizance of the positive matters contained in those clauses so that we may know what the Government wants to do to prevent this kind of thing ever happening again, because we never want another scandal like this. I am not saying we should forget about it, but that we should rectify what is wrong, punish whomsoever should be punished and expose whatever has to be exposed, since we are already engaged in that process. A great deal has already been exposed. We have to get back the money that has been wasted for South Africa and for the taxpayer. However, I make an appeal to the Opposition to come forward and tell the Government: “I know what you are doing is right, and I am therefore going to support you.”

Mr. Speaker, I should be neglecting my duty if I failed to mention the fact that hon. members on that side of the House, including the hon. member for Worcester and the hon. the Minister, have adopted a much more low-key approach today than in other debates on this matter. They have been much more frank today about the abuses committed in the course of this long and protracted scandal. We have all read the facts with regard to this scandal. I think it does them considerable credit that they are prepared to approach the matter in this spirit at this stage.

It was in that spirit, I believe, that the hon. member for Worcester asked me two direct questions to which I should very much like to give direct replies. His first question to me was whether the Opposition seriously wanted this thing to be cleared up now or whether, like a squirrel, we wanted to hoard nuts for future use. We are not only serious in our desire to conclude the matter because it is an unpleasant one and for the other good reasons mentioned by the hon. member, but we are also very anxious to get this matter behind us for purely party-political reasons of our own, so that we may start discussing policy matters … [Interjections.]

You had five months to do that.

We derive no benefit from the fact that second-class propagandists like the hon. the Minister of Community Development are placed in a position to say that we have adopted a negative and destructive attitude throughout. We do not like that.

But it is true.

It is not a role we like to play and it is a role we would certainly like to abandon as soon as possible. I want to tell the hon. member for Worcester quite frankly that what we have been doing from these benches over the past 12 months—for it is now 12 months and more since this matter was first discussed in the House of Assembly—is no more than what we consider to be our bounden duty as an Opposition. However, we should like to put this matter behind us. I shall come back to the obstacles we still see before that can be done. It is true that great progress has been made, but some obstacles still remain.

The hon. member’s second question—and I do not know whether he was equally serious in asking it—was whether there were people in the Opposition who were told by the Press what to do and what not to do. The reply to that, with respect to the hon. members, is that it is nonsense. The hon. member also turned to the hon. member for Yeoville and pointed out that the hon. member for Yeoville had allegedly said: “We will not close the book unless we have read all the chapters.” I think, with respect, that a small error has crept in there. I may be wrong, but I think the hon. member said: “We will not close the book until we have read all the chapters.” In any event, his whole argument was to the effect that we first have to see all the chapters, that we first have to collect the necessary information, before we can close the book—perhaps it is more accurate to say: Before we can close the file, for that is what one is trying to do here, i.e. to close and to put away the file. We have reasons—and my hon. colleagues have indicated some of those reasons and I shall do so too—why it is not possible to do so at this stage.

The hon. member for Yeoville really hit the nail on the head when he said that it was premature to introduce this Bill at this stage, since we had not yet come to the stage where we can act in accordance with these proposals. We are by no means ready to do so. What are we in fact concerned with? Everyone concedes that abuses took place, involving State money as well. It is true that these have been investigated. An hon. member asked whether we did not accept what the Erasmus Commission said about this. Of course we accept it. There are some parts of the Erasmus report with which we disagree—we have pointed this out in the various debates—but we accept, of course, that the Erasmus Commission did valuable work in the sense that they ascertained, with a substantial degree of accuracy at least, how much money had flowed into the secret fund and also, again with some measure of accuracy, where a large proportion of that money eventually went. However, the reports of the Erasmus Commission certainly do not tell us where all those millions of rands went, and the hon. the Minister is not yet in a position to do so either. When one tries to clear up a matter—the hon. member for Sunnyside referred in this connection to his experience as an accountant in the private sector—one at least tries to balance one’s figures more or less before closing one’s file. Sometimes there are amounts for which one cannot fully account, but then one says so at the end and one tries to ensure that these are a minor part of the total amount.

Mr. Speaker, may I ask the hon. member whether he will concede that all the money to be collected will go to the State Trust Board?

Mr. Speaker, if I understand the hon. member correctly, he is asking me whether all these moneys, when they have been collected, recovered or levied, will go to the Trust Board. The point is that they are by no means there yet. There is much that we and the country are entitled to know before we can say that everything is in order, that the money has been recovered and that it is as if it had been appropriated. Sir, allow me to come to that. The hon. the Minister has shown that he is fully aware of the embarrassment in which we shall be placed if we are asked to appropriate this money. The hon. the Minister did me the courtesy of making a copy of his speech available to me in advance, and I quote from it—

A little later the hon. the Minister said—

I do not blame the hon. the Minister—I know what he means; he does not want to ask us to vote formally for retrospective appropriation—but the fact is that what we are doing here will in practice amount to that. That is what we are objecting to.

We have also been asked from the Government side whether we do not agree that at least a part of the money was used correctly and effectively. Let us accept that for the sake of argument. What has also been shown in the course of the debate, however, is that a very large percentage of the funds was not used effectively. The hon. member for East London North was quite right about that. I do not know why hon. members on the other side questioned it by way of interjection.

†The hon. member for East London North said that as far one could see from the figures available to us, more than half of the money that was transferred to the secret funds went into The Citizen and To The Point. I think that is what he said. Taking the figures to the best of my memory, I want to point out that the Erasmus Commission in its first report showed us that about R65 million had gone into the secret fund and of that amount R32 million had gone into The Citizen, and since then we learned that nearer to R15 million than to R14 million had gone into To The Point. We therefore know that between R46 million and R47 million out of R65 million went into those two publications. To The Point had a pretty insignificant circulation outside this country and The Citizen none at all. There is nothing the matter with the hon. member’s logic; this is what happened.

We do not know where all those moneys have ended up and we certainly do not know where the other moneys that are at present still unaccounted for have ended up. The hon. the Minister was good enough to give us the information he has. He told us that he had bills and notes in his possession to the tune of about R13,5 million. I imagine most of that is from Louis Luyt. He also said that he had R5 million in the process of being recovered. I would be surprised if the hon. the Minister was in a position to underwrite absolutely that all of that would come in. He is, however, working on it. He also said that he had cash in the amount of R10,5 million. This brings us to a total of R29 million. I realize that these figures are very approximate, but if one sets that R29 million against the R65 million that went into the secret funds, I should like to know whether we are not entitled to ask, before we close this file, what has become of the other R35 million.

We have to remember that in the final report of the Erasmus Commission we deal with information regarding the bank accounts of individuals into which money flowed in very considerable amounts, amounts certainly not to be sneezed at. How do we know for sure that no money flowed into anybody else’s purse? I do not know whether other hon. members are clearer than I am about the business that was done with Mr. McGoff. From what I read in the Press—that is all the information I have about it—Mr. McGoff is actually disputing the fact that he owes us the money at all. That amount is very substantial; it runs into millions. I could go on and on, but these are some of the outstanding—I use the word not in the sense of “uitmuntend”— funds, the unexplained funds. These outstanding facts must really be brought into the picture before one can finalize a matter of this sort.

Again it is a small sum, but previously we debated the report of the Select Committee on Public Accounts in which it is shown that out of the secret funds, R30 000 was paid in cash to Mr. Chris van Rensburg to put into his back pocket after a note had been made on the file that he was not going to be paid in any case. Are there any other such cases? One would really want to know this before one could possibly be expected to vote for what amounts to an authorization of the amounts that went into this undertaking.

A final attempt to cover up.

The hon. the Minister has made out a case for the existence of a special fund for the Information Service. This is by no means as important an objection to the Bill on our part as the matters I have been dealing with. However, one may ask why the Department of Information should suddenly have been given a secret fund of its own. I ask this question in the light of what the hon. the Minister said to us more than a year ago when he introduced the Secret Services Account Bill, which we opposed at the time. However, I must say that we opposed it then with a very much less profound understanding of these matters than we have now. The hon. the Minister then said (Hansard, 16 March 1978, col. 3173)—

The hon. the Minister wanted to bring the matter under the Treasury at that stage. He continued—

Now, this was in March last year. [Interjections.] At that stage the money was already going through into the Department of Information. I am not entering into an argument now about whether the hon. the Minister knew exactly what the Department of Information was doing with that money. However, I do not believe the hon. the Minister has ever denied that he knew the money was going that way. He even said that he had continued to ask questions about it. Now, the hon. the Minister in the passage I have just quoted, refers to those three secret funds which exist. There is, I believe, the legal principle of inclusio unius est exclusio alterius, which means that if one puts certain headings in, one leaves the others out At that stage the hon. the Minister apparently did not think that there was a case to be made out for further special secret funds to departments. The fewer secret funds we have, I believe, the better. Nevertheless, that there have to be some secret funds, as our amendment also states, is something we have to accept.

Now, there was an attempt by the hon. member for Sunnyside to say that there was actually no “buitewetlike”—to use the hon. the Minister’s own word—transfer of funds, no transfer contrary to law. The hon. member based that argument on the question: “Who can define defence?” According to him defence can include propaganda efforts of one kind or another. [Interjections.] Mr. Speaker, the hon. member for Sunnyside should not try to influence us with arguments as childish as that. The question at stake here is not at all an etymological one about what the word “defence” can mean and what not. It is a question of which department is spending the money. Who was running The Citizen? Was it Dr. Eschel Rhoodie or Gen. Magnus Malan? Was it the Department of Information or was it the Department of Defence? Of course, the hon. member can split hairs and make out a case of some kind by stating that everything is defence. He can even say that paying out old-age pensions is defence because it improves the morale in one’s country. I can help him to formulate arguments of that nature, but he knows perfectly well that that is not what it is all about [Interjections.] The question at stake is the question of which department spent the money …

Mr. Speaker, could I put a question to the hon. member?

No, I have already answered one question. I think that is enough. [Interjections.] If the hon. member had used his ears when the hon. the Minister was talking, and when the hon. member for Schweizer-Reneke was talking, he would not have made such a silly statement. His statement is contradicted by what both those hon. gentlemen said.

Why do you not answer my question then? [Interjections.]

Mr. Speaker, we have objected because this money was transferred contrary to the provisions of the Exchequer and Audit Act, read with the Constitution Act I know it can be argued—it has in fact been argued—that sooner or later these matters are going to have to be put in order.

*At some stage, legislation of some nature will have to be approved by this Parliament in terms of which Parliament concedes that it takes cognizance of the fact that that money is there and that it is deemed to have got there in a legitimate way, even though this is not the case. Before we are asked to do this, however, are we not entitled to more information about this? We know that the money was channelled in a “buitewetlike” way—to use the hon. the Minister’s word again. By the way, the hon. member for Mossel Bay took umbrage at me the other day because I had allegedly referred to an illegal act. He accused me of having accused the hon. the Prime Minister of “criminality”—a word used by the hon. member for Mossel Bay and not by me. However, what does the hon. member say about the word “buitewetlik”? Does the word “buitewetlik” mean anything other than illegal?

There is a big difference between unlawful and illegal.

There is far too much hair-splitting going on here. My argument is that since we are now agreed that the money moved “buitewetlik” from point A to point B, should an attempt not be made to find out, and to make public, who was responsible for such transfer and how it took place? Who signed the cheques? If the person who signed the cheques had been ordered to do so by someone else, the question arises who ordered him to do so. Various amounts are involved in this. The report of the Erasmus Commission frequently mentions this. How did the money get from Point A to point B? Who is responsible for it, and is there anyone against whom action should be taken? Knowing this is a prerequisite before anyone can vote for a Bill of this nature. Do we have the assurance that legal action will be taken against everyone who acted wrongfully and against whom such action should be taken? We have no indication to that effect.

I conclude, therefore, by saying that we know that sooner or later, something of this nature will have to be done, but it is impossible for any Opposition party in the world to agree that that day is at hand.

Mr. Speaker, I am glad the hon. member for Parktown has admitted that the day will come when legislation will have to be introduced to give effect to what we seek to achieve with the Bill which is before the House. But in my opinion and with all respect, his premise is false, i.e. that he expects more information, that more information should first be obtained about the matter, for who is going to decide, and when, that they now have enough information?

Never.

If we bear in mind that it has been said time and again that this affair will not go away, that it will always be with us and will always be cast in our teeth, I agree with the hon. member for Mossel Bay that the Opposition will never say that they have obtained enough information so that we may come to Parliament with legislation such as this.

I listened very attentively this afternoon to the speech made by the hon. member for Bezuidenhout I want to congratulate the hon. member on that speech, because it showed that like us, he too wants to finalize this matter in the national interest He pointed out the various clauses of the Bill, its positive aspects, and I do not think there is a single hon. member of the Opposition who would deny today that we are dealing here with a positive Bill. The hon. member went on to say at the end of his speech that he felt that as a member of the official Opposition, he could not support a Bill asking for these matters to be legalized. However, that is not what this Bill is concerned with. I want to ask the hon. members of the Opposition to reread the Second Reading speech of the hon. the Minister of Finance. The hon. the Minister did not ask hon. members to condone the abuses that had taken place. He did not ask hon. members to say that something that had been wrong had now become right. The legislation which is before the House seeks to rectify this matter. We must now give our house a spring-cleaning. We must put the dirt we have swept out in the right dust-bin and dump it where it belongs.

We are all clearing our offices at the moment with a view to the parliamentary recess. We are opening a drawer here and a drawer there and we are throwing some things into the wastepaper basket Sometimes, however, we find something which is important and this has to be filed in its proper place. This is precisely the intention of clause 7 of the Bill. Hon. members are only being asked to agree that when we come upon certain contracts which bind the Government through the former Department of Information—it is not necessary to discuss this again today—we should meet our side of the contract and carry out that contract. We should not try to back out of it. That is all clause 7 asks for. It is one of the controversial clauses, but if hon. members would read the clause carefully, they would see that this is all we are asking in that clause. We are merely asking hon. members to agree that “any settlement negotiated by or on behalf of the State on or after 1 July 1978” will be deemed to have been negotiated by a department and that any act performed by it on behalf of the State will be deemed to have been performed by that department. We must preserve our integrity; we cannot back out. We must see to it that we do what we have undertaken to do, no matter what has happened and no matter how corrupt the Department of Information was at that time.

However, I want to tell the hon. member for Parktown that we are able to discuss this matter in a completely different spirit today because we had a two-day debate last year during which we said everything we wanted to say. Where I differ with the hon. member for Parktown, of course, is when he says that we are speaking in a different spirit today. The spirit in which we are debating today is no different from the spirit in which we spoke during the short debate last year. We said last year that we conceded that things had gone wrong and that we had to rectify matters. The hon. member may look up one speech after another and he may also look at the speech I made at that time, and he will see that we admitted all this. We did not try to gloss over the facts.

Now we are asking in that same spirit that we should remove the abuses and to put this matter in order in a proper way, and it cannot be put in order without a Bill such as the one which is before the House today. The hon. member for Parktown admits that. During the discussion on the report of the Erasmus Commission last week, the hon. the Leader of the Opposition said that he wanted this affair to come to an end. I accept his sincerity and I regard him as a man of integrity as far as that is concerned, and that is why the Opposition has a wonderful chance today to show that they really want to put an end to this affair. They can say that they will support this legislation, and then we shall be able to clean up this matter properly.

Finally, I want to draw the attention of hon. members of the Opposition to clause 8. Clause 8 very clearly provides that no person whatsoever will be exempted by the passing of this legislation, but the persons concerned will be called to account in due course. After all, the commissions are still investigating these matters; they have not been abolished. We are not going to say, as a result of the passing of this legislation, that everything is over and that we do not want to conduct any further investigations. I also want to point out to the hon. member for Parktown that as we go on and as we find more and more projects in which abuses took place, those moneys, whether they be obligations or rights, will be put where they belong, and eventually the matter will be resolved under the provisions of this legislation.

Mr. Speaker, today we had the umpteenth repetition of the same allegations on the part of the official Opposition. One cannot help gaining the impression that the hon. members of the official Opposition were either completely deaf to all arguments in this House other than their own repeated, uncorroborated, unfounded allegations.

The hon. member for Yeoville opened the debate this afternoon with an allegation against the hon. the Minister of Defence in respect of his alleged part in the irregularities that took place. One would almost imagine that the hon. member for Yeoville was not in the House the day we debated this very matter …

But did not reply.

… and proved beyond all doubt that the only part the hon. the Minister of Defence played in this entire matter that when funds were appropriated to the Special Defence Account—specifically and exclusively for use by the Department of Information for its secret projects—he issued a certificate in respect of the amounts budgeted for in this way on the Special Defence Account, to confirm that the amounts in question had indeed been paid over to the Department of Information, as was meant to happen. That is all the certificates entail. We spelled that out here the other day, but of course the hon. member for Yeoville did not listen and did not pay any attention to it because it did not suit him. If he had listened and had paid attention to it, he would not have repeated the same nonsensical allegations this afternoon.

I agree with the hon. member for Aliwal that the Opposition does not want to be satisfied and will therefore never be satisfied. They will never be satisfied that they have the necessary information. When the information is made available to them, they sit and chat as they are doing now. They pay no heed to the facts and in a succeeding debate, without rhyme or reason, they simply repeat the same old questions and statements regardless of whether they are well-founded …

[Inaudible.]

… or they say it is nonsense, as the hon. member for Orange Grove has just done. To say that a person is talking nonsense, has never been an answer to any argument.

The hon. members for Yeoville and Parktown advanced the argument this afternoon that this Bill was premature. In doing so, they were really admitting by implication that such a Bill would have to be introduced at some time or another.

I did not say so by implication, but specifically.

The hon. member for Parktown says that he said so specifically, and I accept that. He said the time was not yet opportune, that the Bill was premature and that we should have waited longer. In all fairness I want to ask the hon. member now until when we should consequently have waited. The fact of the matter is that the agreements concluded by and the question of the money expended by the former Department of Information could not have been left suspended in the air indefinitely. Surely one cannot continue indefinitely with a contingent liability. If it is one’s intention to finalize the matter and “to close the files”, to use the words of the hon. member for Parktown, then surely at some time or another one has to reach the stage at which one can close one’s account. Since we have in fact safeguarded the interests of the State by means of the State Trust Board Bill and have made provision for a fund into which any amount redeemed which may be recovered and collected and to which the State is entitled, may be deposited, surely there is no need to continue with this encumbrance of old expenditures, old agreements and the contingent liability that might flow from that. Now that we have made alternative arrangements by means of the State Trust Board Bill, this is the appropriate time to introduce this Bill.

Surely one cannot evaluate this Bill in vacuo and regard it as being the only measure dealing with the matters of the former Department of Information. Surely, one should consider it against the background of the measures that have already been passed, one of which is the State Trust Board Bill. One should also consider it against the background of the commissions that are still engaged in their activities and which the hon. member for Schweizer-Reneke has also referred to. Therefore we are not closing the book, to put it that way, on the former Department of Information yet. However, we should like to close the accounts. After all, one does have to close the accounts at some time or other and we believe that now is the right time to do so.

I would like to refer briefly to the speech by the hon. member for Bezuidenhout. I think the hon. member spelled out very clearly to us today why hon. members of the official Opposition are opposing this Bill.

The hon. members are not genuinely opposed to this measure. They are merely concerned about their image. By means of their Press they have created for themselves the image of being the champions of integrity, honesty and morality, that they simply cannot afford to agree with us on this measure today. They are afraid that the feelings which their Press and they have stirred up over the months, will turn against them. They are afraid that the seed they have been sowing, will now start sprouting—that the chickens will come home to roost. They are afraid that the very people on whose behalf they were ostensibly speaking and whom they gulled into believing that the opposition parties are the only guardians of the morals and the morale of the nation, will ask them what they have done now and why they have approved of this “evil” measure.

The hon. member for Bezuidenhout spelled out very clearly to us that it could not be expected of them to support this measure for they were, after all, the official Opposition. Surely it could not be expected of the official Opposition to support the Government when it introduced such a measure. That is what the hon. member said. [Interjections.] I think the words of the hon. member for Bezuidenhout, as an experienced and skilful politician, are a very clear indication to us that we are simply dealing once again with a case of—to use the words of the former General—the dogs barking while the caravan moves on. In that spirit I gladly support this measure.

Mr. Speaker, I should just like to convey the sympathy of this House to the hon. member for Bezuidenhout on the recent serious injuries sustained by his daughter in a motor accident. We share his joy that the latest report, as I understand, is a very promising one. I trust that all will be well with her and that she will soon have recovered completely.

Hear, hear!

As far as the hon. member for Bezuidenhout is concerned, I can only say that I have made a note with reference to his misgivings about the use of the words “secret funds”. As soon as I have the opportunity, I shall discuss the matter with the hon. the Minister of Foreign Affairs. It is, of course, a secret fund, and that is something we shall have to take into account in considering whether one should give it another name. I shall do so personally. Having listened to the various Opposition speeches, I really feel that there is a misunderstanding about this matter. The expression has been used, “they are closing the file or closing the book” as though to imply that if this measure is passed, no problem whatsoever will remain and that we are going to do nothing further about this matter. Of course that is not the case at all, and I believe various hon. members on this side of the House have in fact said so. No one did so more emphatically than the hon. member for Aliwal. The cleaning-up process will very definitely continue and we shall do everything in our power to recover as much as possible of whatever money has been spent by the former Department of Information, to safeguard the assets involved, and to salvage any revenue deriving from that, and to redeposit it in the State Revenue Account. That is our primary objective and in fact is also why we appointed the Pretorius Commission. I should really like to pay tribute today to Mr. Pretorius, the former Secretary of the Treasury and also to the two officials who assisted him so marvellously with this work in which they have now already been engaged since November last year, if it did not begin earlier than that. The details I have been able to furnish here today with regard to amounts already recovered, amounts still to be recovered, and assets that have been safeguarded, have largely been made possible as a result of their work, not exclusively so but largely so, and one has great appreciation for that. I want to make it very clear that the Government will continue, regardless of whether or not this measure is passed, to do everything in its power to bring back as much of this money as possible to the State Revenue Account. I should like to emphasize this very clearly.

†The hon. member for Yeoville says he cannot see how we can bring this measure before the House at this point. The hon. member for Parktown also said that he thought it was premature because all the investigations had not been completed and all the information that we might need on these different projects was not yet available. This relates to the point that I have just tried to make. It is so, but I am not saying that we have completed all the investigations. I am not saying that we have all the information that we would like to have, but the Government will go ahead with its sustained attempts to do just that, i.e. to carry out further investigations and to do everything possible to obtain all the relevant information it possibly can, particularly with the aim of bringing back as much of this money as it can to the Exchequer. That is our major aim. Anyone who is shown to have contravened the law in this whole unfortunate matter, will have to live with the law. There will be and there are at the moment proper inquiries being made in this regard, and I have absolutely no doubt that the legal processes of this country—they are well known—will have to be given an opportunity to take their course. That is absolutely clear.

The hon. member for Mooi River indicated that we were rather tending to throw everything onto the pretext of fighting a “total onslaught”. Sir, I think we should not underestimate the tremendous onslaught that has been made on this country for some time. The tragedy of this matter is not the aim which underlay this effort in the past. The tragedy is that it should have gone wrong …

You made a botch of it.

It is very easy to talk about making a botch of things. It is a pity the hon. member for Amanzimtoti did not partake in this debate, because he might have been able to develop on that delightful and most constructive theme.

Order! The hon. member would have been out of order had he tried to develop that theme. [Interjections.]

Well, Sir, you have saved me from taking that matter further.

The hon. member for East London North said that clause 6 was an admission of guilt on the part of the Government. I do not think that is the case. You know, Sir, it is an interesting point. I am not absolutely certain whether, strictly speaking, we need to introduce this measure. However, we thought we should put the matter beyond all doubt. We have nothing to hide. We very much regret what has taken place, as we have said time and again. So I think that when one talks about an admission of guilt, one must at least be very careful of one’s facts. We have had a commission of inquiry which has submitted three successive reports in which certain people have been completely exonerated three times in succession. However, that does not seem to have much of an influence on the hon. member for East London North. It is regrettable, but let us leave it there although he keeps blaming the present hon. Prime Minister and he blames me.

For transferring the money.

He describes clause 7(1)(c) as “The Citizen clause”. It is very much more than that. In fact, it affects the activity of, amongst others, the Pretorius Committee, and is very important. I myself have no doubt that we are going to find that still more money and more assets are going to come into the net of the credit to the State and to the Exchequer.

I do not wish to pursue this and I am not going to indulge in any kind of personal rebuttal of anything, but I think that, where the hon. member for East London North made a point of criticizing the present hon. Prime Minister and me—he mentioned us specifically—I should in fairness like to make one or two remarks in a constructive sense. I should like to say that the extra-statutory and, I would say, unorthodox procedures adopted to fund and audit the secret projects of the former Department of Information were not of my making nor of that of the present hon. Prime Minister. We inherited the method that was employed.

You continued it.

I do not dispute that at all.

That is fine. I am not aiming this specifically at any one hon. member, but it arises as a result of certain criticisms and I should like to put this view in a general form.

Secondly, I should like to say that the present hon. Prime Minister and I never liked the method that was employed, and we are on record as having said so. However, we accepted the authority of the then Prime Minister— who is on record as having said that he took full responsibility in this whole matter—that unorthodox and special measures were necessary to meet what was strongly and genuinely felt to be special circumstances, namely to fight a very serious, well-organized and sustained propaganda war against the Republic and its people. We accepted that in good faith and we accepted that there was no other effective way in which this total threat against South Africa could in the national interest be covertly met. I want to go further and say that, although those methods were adopted, when we realized, increasingly, what precisely the methods were, we gave attention to the question of how we could put this right. It was by no means an easy matter. I should like to say that we did succeed. We succeeded with legislation early last year—that took long discussion and preparation the year before. We changed those procedures and we restored formal legality to the funding of these projects. This, to my mind, is the important point that, faced with a very difficult inherited problem and a situation which I and the present Prime Minister most certainly did not like, I succeeded with the very substantial support of the present Prime Minister in changing this whole approach in terms of the Act last year.

I want to say, furthermore, that within the constraints on me, inherent in the previous system, I succeeded in containing the amounts made available to the then Department of Information to a very substantial extent, and the records on that are available. Further, in full recognition from a technical point of view of the extra-statutory nature of the method adopted at the time, the funding of a counter-propaganda campaign from the Special Defence Account as part of the total strategy against the onslaught on the Republic, is not all that far-fetched or totally in conflict with the spirit of the appropriations voted by Parliament for Defence. The present Prime Minister and I accepted in good faith that the moneys were being used to fight the propaganda war against the Republic just as effectively as the Government could do so. Although the letter of the law was contravened, the spirit of the parliamentary appropriation under the Defence Vote should be taken into account when political judgment is passed on the methods used to finance the Republic’s response to the war-like propaganda onslaught on all of us in this country by the overseas media and by our enemies inside and outside this country.

Finally, I want to say that at no time did I approve the former Department of Information’s projects specifically. Even since 1978 the new Act simply requires that I should approve the broad categories of services as decided by the hon. the Minister of Foreign Affairs who now is at the head of our Information Services. One can make a few more points, but I do not want to go further. I simply say that I think it is right that we on our side should bring this measure before the House. I am very glad the hon. member for Parktown said that he noted that in doing so we were attempting to be open and frank. I think he said that in relation to the introduction of this measure today, if I understood him correctly. I appreciate his remark because that is what we are trying to do.

*I am a little disappointed that the Opposition feels that they cannot support this measure. I can see that there might be problems; I should also like to be reasonable. However, we have the best intentions. I believe it is right and necessary that a responsible Government should come forward with such a measure. We have nothing to hide or cover up. After all the discussions and after everything that has been written and said during the course of many months, we should now like to give this House and its members the opportunity—after all, it is the highest authority in the country—of deciding whether it is reasonable for us to say now that the amount expended by the former Department of Information, and as defined here, shall be deemed to have been appropriated by Parliament. That is what I am trying to do here.

To those hon. members on this side of the House who have seen their way clear to supporting the measure so effectively and positively, I should like to convey my sincere thanks for their contributions. I shall not mention all of them by name. I think the debate has been conducted in a very responsible manner and I have great appreciation for that. I must say that I can request with confidence that the question be now put.

Mr. Chairman, in dealing with this schedule we are dealing with one of the most critical aspects of the Bill. I refer to the schedule, as read in conjunction with clause 6 of the Bill which was approved last week. It is critical because it deals with the rights of people to citizenship. It legislates to deprive people of their South African citizenship and to give them, in return, citizenship in what will be the independent State of Venda. We know, from the debate on other aspects of the Bill in the previous stages, that the present situation is roughly that 68% of the people of Venda live in the area to be known as the State of Venda and that some 32% live in the rest of the Republic of South Africa. Therefore in dealing with the aspects referred to in this schedule, we are dealing with the rights, not only of people living in Venda itself at present, but also with the rights to citizenship of Venda people living within the Republic of South Africa. I want to say immediately that if there is one single, topical, political issue to which Black South Africans are particularly sensitive at the present time, it is the question of citizenship and the threat to their South African citizenship. We know, from discussions in the townships and from the attitudes of Blacks in the homelands, that the question of citizenship, the issue of their future citizenship in South Africa, is a particularly sensitive issue. I believe it is delicate, sensitive and dangerous, and I believe we have to take very great care, at this time, when we are dealing with the citizenship rights of Black South Africans. Ever since the debate in Parliament last year, when the then Minister of Plural Relations and Development made his notorious statement about the Government moving towards a situation in South Africa where in time—I think he mentioned a period of five years— there would be not one single Black South African, there has been a great deal of uncertainty and unease amongst Black people in South Africa about the direction in which the Government was moving and about the consequences this would have for the Black people, particularly in regard to the question of citizenship. I can think of no statement, since the Biko issue which has done more harm to good relations in South Africa than that particular statement, suggesting to people that they were going to lose their South African citizenship. It is for them a forced deprivation of their rights to citizenship in South Africa. If one looks at the schedule, one sees that one is dealing with Venda people in almost every type of situation in which they can find themselves. One is dealing with, and I quote from Schedule B—

with—

with—

with people who speak—

and with any person—

In other words, we are dealing with Venda people, wherever they may be and whatever connections they may have had with the homeland that we now know as Venda. I believe that this schedule, in its present form, is a very dangerous schedule indeed, related as it is to what is going to happen in terms of clause 6 which was passed the other day.

For that reason I want to move the following amendment—

1. (a) Every person who at the commencement of this Act is a citizen of Venda in terms of the Black States Citizenship Act, 1970 (Act No. 26 of 1970), and is domiciled or permanently resident in Venda;
2. (b) every South African citizen not mentioned in paragraph (a) who voluntarily acquires citizenship of Venda, with effect from the date of such acquisition.

The effect of this is obvious. It states that those people who are resident in Venda at the present time will acquire Venda citizenship and that the other people who will acquire it will be the people who are outside Venda and who voluntarily ask for Venda citizenship. We believe that this would be an improvement and would be of assistance to the Government. This piece of legislation is going to be passed, but at least this amendment would give those Vendas living outside Venda the right to have the option of either retaining their South African citizenship or of making a voluntary application for Venda citizenship if they want it. I believe that this is an extremely important amendment and that the hon. the Deputy Minister, who has been given notice of the amendment, would be well advised to accept the provisions contained in it. We know that throughout this debate there have been no indications about what future links there will be between an independent Venda and the rest of South Africa. From across the Atlantic the hon. the Minister himself is making very promising sounds. He is outlining some glorious concept of what the future will be. That is promising and encouraging, but at this particular time, when we are passing this proposed legislation, there is no indication whatsoever from the Government about what future links there are going to be between this independent State and the rest of South Africa. In these circumstances we believe that passing legislation which interferes with citizenship rights is totally unwise and potentially dangerous.

Mr. Chairman, I stand up in support of the hon. member for Musgrave. I do not think, unless one has really taken the trouble to discuss this question of citizenship with urban Black people, that one can possibly realize what a cause of tension and anxiety it is among those people. Since the passing of the Transkei and Bophuthatswana independence legislation I have spoken to many Black people. They are all desperately worried about the whole effect, on their lives, their futures and that of their children, of the deprivation of their South African citizenship. They have been somewhat reassured by the fact that all these pieces of legislation, including the one we are considering today, contains a safeguard in the sense that, apart from losing citizenship, they will not be deprived of other rights. However, I have to tell the hon. the Deputy Minister that this does not satisfy these people because they consider themselves to be South Africans. When children are born after the date of independence, those children have to be registered at birth, and the birth certificate states that he or she is a citizen of whatever the independent territory happens to be. Equally I cannot impress strongly enough upon the hon. the Minister the anxiety that these people experience when their children, aged 16, have to take out reference books. Then the same sort of thing happens. They are told to apply for papers of the country to which they belong by some distant link of origin or language, and it very often is a distant link because, let me point out, in Soweto today there are urban-born Blacks of the third generation. They have lost their link with the tribal homelands. They may speak the vernacular at home, but their actual tribal links have been broken, or if not broken, at least very considerably weakened. Those people consider themselves to be South Africans. It is not for us to deprive them of something which they had as of right I therefore support the plea of the hon. member for Musgrave that the schedule be amended so as to apply only to those people who are either living in Venda or were born or have lived in Venda for a certain period of time. I ask the hon. the Deputy Minister to give this very serious consideration, because I can assure him that that is one of the main causes of tension among urban Black people today.

Mr. Chairman, we shall support the amendment of the hon. member for Musgrave. As indicated on a previous occasion, when the hon. member for Klip River attempted to debate whether there are urban Blacks or not, I think our attitude is completely clear. This is the real big debate that is going to feature more and more prominently in the time ahead. Offering one no choice as to what one’s status is to be as in the case of the people of Venda who are to become independent, is something we cannot countenance. Therefore, we shall support the amendment.

Order! Has the hon. member for Houghton moved her amendment?

No, I first want to see what happens to the amendment of the hon. member for Musgrave, because perhaps it will not be necessary for me to move my amendment.

Mr. Chairman, hon. members have once again emphasized the fact that the question of citizenship is a sensitive matter. If this is so—and I accept that it is a sensitive matter—I do want to say that one should listen to what the people themselves say. When one does this, one has the best chance of sorting out a sensitive matter in the best way.

I want to refer hon. members once again to the statement which the Chief Minister of Venda issued on behalf of the cabinet on 7 June 1979. I quote—

I repeat: The Legislative Assembly of Venda was unanimous in embodying this definition of who their citizens will be, in their constitution. It is exactly the same definition which is printed here. The Legislative Assembly of Venda consists of citizens living in Venda and also of citizens living outside Venda. For instance, the leader of the opposition in Venda lives in a peri-urban area. The Legislative Assembly consists of members of the governing party and members of the opposition party. Therefore it is an institution representative of the people of Venda. Those people, unanimously, without a single dissenting vote, decided on this definition and procedure by which to establish who will be their citizens in future. Therefore I feel that after there has been consensus among the Venda people themselves, must we now tell them that the way in which they wish to define their citizens, the way in which their people can obtain citizenship, is not approved by the South African Parliament, that it cannot be done in this manner? Consequently I cannot accept the amendment, because in the first place we shall be detracting from the independence of Venda as we will reject their decision and demand that they take another decision on how matters will be in future, should we accept the amendment. In the second place, we have come to an agreement with the Venda people. They have already ratified this measure through their Legislative Assembly and if we were to accept this amendment now, we should not be honouring our part of the agreement and we should be making a farce of negotiation, consultation and good faith. Therefore I cannot accept the amendment. Accordingly I shall conclude by saying that we keep the schedule as it is at present, that it has been agreed upon as such and that there is consensus between South Africa and the Venda people.

Mr. Chairman, I rise merely to point out to the hon. the Deputy Minister that the amendment which we have moved does not deny the Venda the right to have citizenship in Venda if they want it, but at the same time it makes it possible for a Venda living outside the territory to apply for Venda citizenship. It therefore gives him the option of exercising his rights to South African citizenship if he does not want Venda citizenship. The hon. the Minister has quoted some records in this regard, but I want to draw his attention to the fact that the Leader of the Opposition in Venda is on record as having said in September last year that he believed that the Venda people should enjoy South African citizenship. He said that whatever his view was in regard to the issue of independence for Venda, he believed that the Venda’s rights to have South African citizenship should be protected. This was the man who got the majority of the support in the election which was held for the Legislative Assembly. I believe one is therefore quite unwise to ignore the fact that there will be people living inside of South Africa who will be grossly injured by virtue of the fact that without any say in the matter they are going to be deprived of their South African citizenship. The emphasis of our amendment would be to say to those people who want Venda citizenship that they can renounce their South African citizenship by applying to the Venda Government for citizenship of that independent State. I believe this is a far more reasonable proposition, and the hon. the Deputy Minister is most unwise to reject the spirit of the amendment.

Mr. Chairman, I believe that if the hon. member for Musgrave quotes the Leader of the Opposition in Vendaland he should be more specific. He was obviously merely quoting from memory …

I have a good memory.

This definition corresponds to the definition of citizenship in the Constitution Bill unanimously adopted by Venda, including the Leader of the Opposition there.

The hon. member for Musgrave made another statement that can surely not go unchallenged. He says that this measure represents a forced deprivation of South African citizenship on the part of the people of Venda. I want to ask the hon. member for Musgrave: Who has forced the people of Venda to accept this schedule which has been included also in their own Bill? What coercion was there on the people of Venda to lay down their South African citizenship and to accept a Venda citizenship?

They had only one option.

I want to ask the hon. member for Musgrave and the hon. member for Houghton—the hon. member for Houghton told us she spoke to several people from Transkei and Bophuthatswana who were very sorry that they had lost their South African citizenship—whether they have ever spoken to a single Venda. I am not referring to the leading lights, the leaders of Venda, the leaders in the Opposition party and in the Government party, because we have spoken to them and they have unanimously accepted this. I am referring to the minor lights amongst the Vendas. Has the hon. member spoken to any of them and has she authority to speak on behalf of them in respect of their being deprived of South African citizenship?

Why do you not let the majority as per the election have their say?

The hon. member for Musgrave and the hon. member for Houghton all but said that Venda citizenship is inferior to South African citizenship. [Interjections.] That is the inference one draws from what they said. I believe the hon. member for Musgrave does not speak on behalf of the people of Venda. In a very arrogant fashion he comes here and in effect tells the people of Venda that they are not qualified to decide for themselves …

That is absolute nonsense.

… and do not know what is good for them: They must retain South African citizenship. I recall that not a decade ago, in 1970 I believe, when we debated the question of Black citizenship for the homelands, the Opposition made a mockery of the fact that we were propounding double citizenship, viz. South African citizenship and citizenship of the homelands. Today, however, they come forward stating that they want the Blacks to retain their dual citizenship.

We did not say that…

The hon. members should at least be consistent. Sir, I do not accept the fallacious arguments of the hon. member for Houghton and we reject her amendment.

Mr. Chairman, the hon. member for Port Natal says he does not accept the arguments, the “fallacious arguments” as he calls them, advanced by the hon. member for Musgrave and me. In fact, Sir, we did not advance those arguments. He has invented them. He is a very quick thinker on his feet and he has invented arguments we did not use at all. Indeed, if he would take the trouble to read the second leg of the hon. member for Musgrave’s amendment, he would see that it provides that any person not domiciled or permanently living in Venda should have the right to become a Venda citizen if he so desires. It is, therefore, not a case of denying people that right. In fact, we should like to give them that right.

As regards the hon. member’s second question, that of whether we have ever spoken to any Venda, I must tell him that the hon. member for Musgrave, the hon. the Leader of the Opposition and I spent a very interesting few days travelling around Venda a few years ago, during which we met Chief Mphephu and a number of other Vendas.

That is long ago. You will not even be able to remember what was said.

That is not so long ago. It was, in fact, in 1972.

That is seven years ago.

Yes, that is seven years ago. That is, however, just one aspect I wanted to mention; I wonder whether the hon. member would let me finish what I am saying. We travelled around that territory and saw quite a lot of it. Indeed, we spent a number of days with the Commissioner-General who was very hospitable and told us a great deal about the Venda people, including the story of the girl who went down to the river to fill her urn with water and was promptly eaten by the sacred White crocodile. I can tell hon. members a lot of stories and myths of Venda, but I will not do it now. I want to tell the hon. member that I in fact have in my employ in Johannesburg a Venda who has been with me …

Tell us what his wages are.

I can tell the hon. member that his wages are, I would say, probably five times the wages of anybody the hon. member employs. Anyway, I leave that there. That Venda has been with me close on 40 years. I would not say that this was a discontented employee. He owns his own motor-car and he has his own home in Soweto. He has been in our employ, and part of our household, for nearly 40 years. This man was appalled when I informed him that after this session of Parliament he would no longer be a South African citizen. [Interjections.] I told him no more about the Bill except that Venda was becoming an independent country and that if he ever visited his aged parents in Venda he would probably need a passport, because, when he came back to South Africa, he would no longer be a South African citizen. He was appalled. [Interjections.] He is an ordinary person. He is a chauffeur, but I can tell the hon. member for Port Natal that he was horrified to find that he was going to be deprived of his South African citizenship. He also informed me that the vast majority of urban Venda voted against Chief Mphephu. All his friends to whom he had spoken who had voted in that election had voted against Chief Mphephu.

So, there we are. We do know a little bit, and we have spoken to at least some of the Venda citizens. Therefore I should like to move the following amendment—

The hon. the Deputy Minister has indicated that he is not going to accept the amendment moved by the hon. member for Musgrave. I shall vote, of course, for the hon. member’s amendment. However, I want to give the hon. the Deputy Minister another opportunity of tempering this Bill. By accepting my amendment the hon. the Minister would leave as citizens of South Africa everybody who was a citizen before the enforcement of this legislation, any person born in or outside Venda, who is not a citizen of a territory which is a former part of the Republic of South Africa, or is currently part of a territory within the Republic of South Africa. It will also have the effect of deleting “every person who has been lawfully domiciled in Venda for a period of at least five years”. It would exclude “every South African citizen who is not a citizen of a territory within the Republic of South Africa”, “… South African citizen … and is not a citizen of Venda in terms of paragraph (a), (b), (c) or (d) …” In the last instance it will also exclude the question of the language they speak. I want to make it quite clear, however, that I shall still exercise my prerogative in voting for the amendment moved by the hon. member for Musgrave.

Mr. Chairman, I should like to thank the hon. member for Houghton for the kind opportunity she affords me. Fortunately, I will not allow myself to walk into that trap.

[Inaudible.]

It amounts to the same thing. The hon. member is trying to water down the citizenship of Venda. For the same reasons that I cannot accept the amendment by the hon. member for Musgrave, I also do not see my way clear to accepting this amendment of hers. I want to point out an important matter to hon. members once again. They allege that the majority of Vendas outside Venda voted against Chief Mphephu. This may be so. I shall not dispute that. This does not, however, mean that those people do not want to be citizens of Venda. Perhaps they want a different Government At the same time, however, they will also remain citizens of Venda.

[Inaudible.]

The fact is that the recess committee which drew up the constitution of Venda, consisted of members of the governing party and members of the opposition party. The Constitution was amended, amendments proposed by members of the opposition. They made proposals. Not one of those proposals, however, concern citizenship. They concerned other matters, for instance who may be President of Venda and who not, and how a vacancy in Parliament in Venda should be filled. On the question of citizenship, however, they were unanimous. For that reason I repeat that I cannot accept these amendments.

Mr. Speaker, I move—

As I stated in my Budget Speech on 28 March, we in South Africa are engaged in an important programme of tax reform, the object of which is gradually to move away from the present system, where the principal emphasis is placed on direct taxes, to one where both direct and indirect taxes play a more balanced role. The first and historical step along that long and difficult road was taken last year when sales tax was introduced, and I am pleased to be able to say that as a result of thorough planning the proceeds from that source have already provided us with sufficient freedom of movement to be able to make the considerable income and other tax concessions which I announced on 28 March.

To those who, like Oliver Twist, expected more, I should like to mention that as in the case of politics, tax concessions are the art of the possible. Given a maximum tax revenue which we could afford to surrender, my department tried out no fewer than 13 possible combinations of tax rates, income abatements, etc., before the right combination for the occasion was found. I am fully aware that, in view of the decline in the value of money, the level on which the maximum rate of taxation is reached—55% on an income of R30 000 in the case of a married person—is still not the level which we should like to see, and as soon as circumstances permit, further attention will be given to this matter. As I have said, however, the road ahead is not an easy one, and at this stage it is impossible, and in fact undesirable, to make any firm predictions. However, we are now moving in the right direction, and it is expected that it will be possible to maintain the momentum. Hon. members are already in possession of a comprehensive explanatory memorandum on the Bill, yet I still think that a few words by way of explanation of the background to certain of the amendments, as well as of matters which are receiving our attention or which are of general interest, would not be inappropriate.

I shall consequently begin with the rates of tax for the coming year of assessment, and in this connection I should like to draw the attention of hon. members to clauses 1, 2 and 5, as well as to the Schedule to the Bill. As may be deduced from my previous remarks, the new scales should not be seen exclusively as a fiscal measure, but also as a further step in our programme of reform. That the concessions in many cases are considerable will be realized next month by thousands of salary earners when the new deduction tables come into operation. Provisional taxpayers will share the same experience during August, and when the final assessments are issued after the close of the 1979-’80 tax year and a final adjustment is made, this will come as a further bonus. I hope this will serve as an incentive and that returns will be submitted sooner and more expeditiously next year.

Clause 3 inserts amendments to certain definitions in section 1 of the Principal Act. Some of these amendments will be discussed later when I come to clause 8, and in the meantime I shall confine myself to the question of the amalgamation of co-operative societies.

Section 94 of the Co-operative Societies Act lays down the rules that have to be followed when two or more co-operatives amalgamate. Actually the procedure is very simple. What actually happens is that the amalgamating co-operatives disappear and from them a new co-operative will arise which in reality is merely a continuation of the original co-operatives. However, the repercussions for the purposes of income tax are considerable, for any assessed loss which the amalgamating co-operatives may have had, will die with them. Moreover, if some of the debts which the new co-operatives took over from the old ones subsequently appear to be irrecoverable, the amounts thus written off by the new co-operatives may not be claimed as a deduction in determining taxable income. There are other repercussions as well which need not be spelt out here.

At present my department is reviewing the entire situation and will, it is hoped, be able to make suggestions in this connection within a few months. The amendment which is being inserted by clause 3(1)(e) is merely an interim measure intended to make the deduction of a bonus by the amalgamated co-operatives possible.

I may add here that it is in no way the intention to amend the position of ordinary companies, which may amalgamate in terms of the Companies Act. Such amalgamations are not comparable with those which occur under section 94 of the Co-operative Societies Act, and they shall continue to be subject to the present rules in the Income Tax Act.

Clause 6 gives effect to the proposal in my Budget speech that a special tax rebate would be introduced for inhabitants of Walvis Bay. However, I must mention here that the reduced rates of tax, which will be applicable with effect from the 1980 year of assessment, will to a certain extent reduce the difference between the South African and the South West African taxes and will in some cases even eliminate it entirely.

Business suspended at 18h30 and resumed at 20h00.

Evening Sitting

The amendments to section 10 of the principal Act which are being inserted by clause 7 are primarily of a textual nature. The most important is perhaps the exemption in respect of the receipts and accruals of the South African Special Risk Insurance Association. This association was formed in order to provide insurance in respect of damage which may be suffered as a result of sedition.

†I come now to the amendments which are to be made, in terms of clause 8, to various portions of section 11 of the principal Act. That section provides for the general deductions which may be taken into account in the determination of taxable income. Together with the reduction in the rates of tax, the increases in the abatements and the amendments to be made in terms of clause 13, these are perhaps the most important in the Bill, certainly as far as self-employed persons are concerned.

We have never sought to limit the amount which a taxpayer may contribute annually to a pension fund or a retirement annuity fund, but what the principal Act has done is to limit the contributions which may be deducted for income tax purposes. At one time the limits were fairly low, but they have been raised at regular intervals, especially during the past few years, and now stand at R1 750 in the case of a pension fund and R3 500 in the case of a retirement annuity fund. The R3 500 limit also applies where the taxpayer is a member of both types of funds. Where a taxpayer is earning, say, R10 000 a year, a maximum permissible deduction of R1 750 in respect of contributions to a pension fund is by no means ungenerous, but where he is fortunate enough to be earning, say, R40 000 a year, an annual contribution of that order could seldom hope to secure him a pension which would be in keeping with his earnings. A somewhat similar situation applies in the case of a retirement annuity fund.

What we propose to do, therefore, is to allow a taxpayer to deduct, by way of pension contributions, an amount of up to 7,5% of his remuneration from retirement-funding employment. Where a taxpayer contributes to a retirement annuity fund he will, in future, be allowed to deduct up to 15% of his income from trade, after excluding his income from retirement-funding employment. The salaried man to whom I referred a moment ago as earning R40 000 a year, will therefore be able to contribute R3 000 annually to a pension fund and have that amount deducted in the determination of his taxable income, while the professional man whose practice yields him a profit of R40 000 will be able to contribute R6 000 to a retirement annuity fund and have that amount deducted for income tax purposes. At this point I must emphasize that, while making these concessions, we are entrenching the existing deductions in the law, which means that someone whose income from trade is less than R23 334 will still be able to claim up to R1 750 in respect of pension fund contributions or R3 500 in respect of retirement annuity fund contributions. Where he is a member of both types of funds, the R3 500 limit also applies. In essence, then, these concessions will enable those persons with an annual income from trade in excess of R23 334 to lay by more generously against the day that none of us mortals can hope to escape.

Hon. members may well ask why the amounts deductible in respect of pension contributions and those in respect of retirement annuity fund contributions differ. The answer to this question is that, although the end result is the same in the sense that an annuity will one day be paid to the member, the two types of funds differ from one another in a basic area. What will one day emerge from a retirement annuity fund will be entirely the product of the member’s own sacrifices during his working life, whereas in the case of a pension fund the annuity payable on retirement is usually the product of the employer’s contributions as well as those of the members. In many cases the employer’s contributions are very generous, far exceeding those of the employee. In these circumstances we think we are fully justified in maintaining this distinction which has applied ever since retirement annuity funds were first recognized for income tax purposes.

I may add here that the amendments made, in terms of clauses 17 and 18, to the second schedule to the Income Tax Act are directly linked with the amendment being made, in terms of clause 8, to section 11 of the Act.

I shall deal next with the amendments introduced by clauses 10 and 11. The Income Tax Act contains provisions which are designed to encourage the building up and maintenance of a South African merchant fleet consisting of first-class vessels. In a nutshell, the ship-owner is permitted to write off 40% of the cost of a ship, in the year of purchase, and the balance of 60% in six equal annual instalments of 10% each. Details of the types of vessels which qualify for these allowances are given in the White Paper. It has been pointed out recently that whereas a coasting vessel of as little as 200 gross register tons so qualifies, a fishing trawler does not, unless its tonnage exceeds 1 000 gross register tons. This may have been a reasonable distinction to have made 20 years ago, but times have changed. Trawlers have tended to become smaller, but because of modem equipment and the installation of powerful machinery, they are much more efficient than their much larger sisters used to be. Because of these developments, and not only because of inflation, the cost of building a modem trawler has risen astronomically. I consider that there is ample justification for reducing the qualifying tonnage of a fishing vessel from 1 000 to 200 gross register tons.

The amendment made, in terms of clause 10, to section 12 of the principal Act merely ensures that, where a factory trawler qualifies for the special shipping allowance in terms of section 14 of the Act, the Machinery initial allowance granted in terms of section 12 of the Act will not be allowed in respect of that portion of the cost of the trawler that relates to the processing machinery or plant built into the trawler.

Clause 13 amends section 24B of the principal Act. That section was introduced last year and deals with gains or losses on foreign exchange transactions. In drafting the amendments we have had regard to the helpful advise given to us by professional associations and to the commentaries which have appeared in certain taxation and other publications. While it would be too much to hope that we have satisfied every critic, we have, I think, gone a long way in that direction. Further attention will be given to the section when circumstances permit and, if necessary, further amendments will be proposed in due course.

Hon. members will be aware that, as the law now reads, section 24B does not apply if a forward exchange contract was available to the taxpayer and he failed to make use of the facility. When the section was introduced last year, such contracts were available only in respect of a limited range of transactions, and the inclusion of this condition was intended as a sort of carrot and stick to encourage businessmen to take out forward cover where it was, in fact, available. Since that time the De Kock Commission has reported and one of the results of its labours is that forward exchange contracts are now available in a wide variety of circumstances. Since it was never intended that section 24B should be virtually a dead letter—in fact our intentions were exactly the opposite—we have reviewed the position and decided to remove this particular condition with retrospective effect.

Section 64C of the principal Act provides for exemptions from the non-residents tax on interest, and hon. members will have noticed that in terms of the third amendment introduced by clause 14 I am taking powers, in consultation with my colleague, the Minister of Community Development, to exempt from the tax interest on foreign loans raised for housing or community development schemes in the Republic. The provision of suitable housing to meet the needs of our growing population is a matter of the greatest moment, and I think it will be agreed that the sacrifice of a limited amount of revenue, in order to reduce the cost of that housing to some extent and at the same time to attract funds from abroad for this purpose, is a small price to pay.

The nature of the amendments to be made, in terms of clause 15, to section 83 of the principal Act is apparent from what is said in the explanatory memorandum. I think, however, that a few words of additional explanation are called for. As far as is possible, judgments or decisions of the Income Tax Special Courts are published for general information. In terms of the regulations framed under the Income Tax Act, however, publication of any such judgment or decision is subject to the consent of the appellant. Now it sometimes happens that an appellant, for reasons best known to himself, declines to allow a judgment to be published, even though his identity is concealed. This is indeed a pity, and it is felt that valuable decisions should no longer be capable of being withheld from the public at the whim of the tax-payer. The proposed amendments will enable the President of the Court, who is a judge of the Supreme Court, to overrule the appellant in certain circumstances. The anonymity of the appellant will be fully preserved, just as has been the case in the past.

The amendment introduced, in terms of clause 16, to the First Schedule to the principal Act follows an announcement made in my budget speech that farmers who have elected the system of equalized tax rates (“nivellering” in Afrikaans) will henceforth be taxed at the lower of the equalized rate of their rate of tax for the year in accordance with the normal rules. This represents an extremely generous concession to farmers and should be of particular benefit to those who have suffered as a result of the recent drought.

Under the pay-as-you-earn system of tax collection, the threshold at which provisional tax becomes payable has, for many years, stood at R500. The amendment effected by clause 19 will raise that threshold to R1 000 and enable the Secretary for Inland Revenue to remove the names of some 210 000 persons from the register of provisional taxpayers. Not only will this result in a measurable saving in costs, but it will also save a large number of elderly persons the trouble of estimating their incomes twice every year and of making a journey to the local revenue office every six months in order to pay their provisional tax. This does not, however, mean a sacrifice of revenue. It is a mere deferment, as the tax will be collected when an assessment is issued.

I am sorry that what I intended as relatively brief remarks on this Bill have become somewhat extended. There are, however, one or two further matters which I wish to touch on briefly before I close.

In my budget speech I referred to the matter of fringe benefits and stated that a report on the subject was expected soon. That report has since been submitted to me, and arrangements are being made for it to be published in the Government Gazette during the latter half of July so that the public will have a full opportunity to study the proposals and submit their comments. It is somewhat disturbing to note that, in spite of my budget statement, reports have appeared in various newspapers and periodicals suggesting that a massive witch hunt is about to be initiated and insinuating that civil servants receive valuable tax-free perquisites which will continue to go untaxed. Those reports contain some truths, some half-truths and some untruths which are twisted in such a way as to create the impression that civil servants and members of the House are an elite class growing fat at the expense of the general public. If the writers of these misleading and damaging articles would take the trouble to examine the facts, and compare them fairly with what is enjoyed by persons in the private sector, they would be forced to change their tune. In any event, it will soon be seen that the report on the taxation of fringe benefits goes out of its way to ensure equality of treatment between the public and private sectors.

Finally, in regard to the matter of a capital gains tax, the situation seems to have been reached where the introduction of such a tax is regarded in certain quarters as inevitable. This, however, is not the case. A draft Bill will be published for general information during the recess and, in the light of the comments received from all quarters, a decision will be taken one way or the other. In the meantime the Government is in no way committed to the introduction of the tax.

Mr. Speaker, the hon. the Minister commenced his address to this House by referring to Oliver Twist and to the fact that there was this tendency to ask for more. There is something I must point out to the hon. the Minister, however. If Oliver Twist had not asked for more, where would he have ended up? I think it is obvious that one has to bring pressure to bear on the hon. the Minister of Finance to see what one can get out of him for the public benefit.

You are talking now about the Artful Dodger, Harry. [Interjections.]

Nevertheless, I should like to go back specifically to the budget and to the proposals which the hon. the Minister then submitted to the House and which are now contained, in part, in this legislation. One thing is very clear, and that is that the hon. the Minister made certain tax concessions, at that time, with a view to giving more disposable income to the public at large. He dealt with it, not only at the higher levels of taxation, but also at the lower levels of taxation.

I believe the hon. the Minister has to answer these questions when he replies to the debate. Did he, at the time when he presented those taxation proposals to this House, contemplate that the rate of inflation would be as high this year as it now seems it is going to be? Did he not, at that time, think that there would be a very much lower rate of inflation in South Africa, and did he not base his taxation proposals on that lower rate of inflation? I want to submit—and I think it will be proved from his own budget speech— that he certainly did not contemplate the high rate of inflation which is now hitting South Africa. He did not contemplate it, and if he did not contemplate it, the extra disposable income he wanted to give to the taxpayers of South Africa has not been given to them in terms of this legislation. I should also like to submit to the hon. the Minister that in those circumstances he has a moral obligation to do something more for the taxpayers, because not only do they not have this extra disposable income, but the economy as such is not getting the stimulation which he thought it would get as a result of the increased consumer demand and following upon the greater amount of income that was available. The truth, however, is—and I do not allege that it is the hon. the Minister’s fault, because there are prevailing inflationary circumstances for which I certainly do not want him to shoulder the burden—that the tax concessions which have been granted are not even enough, in the existing circumstances, to cover the increase in prices we are going to have for the rest of the current financial year. Therefore, I believe that in the circumstances there is an obligation on the hon. the Minister to do something more for the taxpayers of South Africa, to give them some extra incentive, not only in order to assist their lot, but also to get the economy going in a manner in which he said it should be got going when he presented his budget to this House.

I should like to make a special plea to the hon. the Minister. He has not brought about any reduction in sales tax at all this year. He has maintained the same percentage of sales tax. In introducing this Bill he spoke of the basis of equality and the balance between sales tax, indirect taxation, of the one hand and direct taxation on the other hand, and about what further plans he has in mind. Sales tax, however, is hitting the poorer section of the community. Therefore, I want to appeal to the hon. the Minister to make some definite effort to meet the needs of the poorer section of the community, the needs of the man in the street, in the face of the burden he has had imposed on him as a result of the increased inflation rate in South Africa. I therefore make that appeal to the hon. the Minister.

I also want to tell him again that if the economy is to get going, there must be some further degree of stimulation, and he has the fiscal instruments with which to do so. We therefore appeal to him to do this in the circumstances.

There are other things—though they are not before us now—that I believe could be done by this measure. I want to mention, for example, that we are dealing in this Bill with the concessions that are granted in respect of the machinery and equipment used in manufacture, but once again there is no concession for the creation of jobs, yet this is the most important thing of all in the whole picture of the economy of South Africa. People should be encouraged to create new jobs, and here I want to appeal to the hon. the Minister. It is vital for him and his staff, and everyone else connected with this whole set-up, to apply their minds to how incentives can be given to the private sector in order to create new jobs and to deal with the unemployment problem of South Africa. That, to my mind, is a major omission in this piece of legislation.

There are also other aspects that one could attack in a critical vein. The hon. member for Houghton will, for example, deal with the position of the married woman, and therefore I shall not enlarge on this. I do, however, want to deal with the position of the aged for whom enough is certainly not being done in this situation. Here again, the hon. the Minister has the tools available to him. There is a simple tool he can use, and that is to create a savings instrument in terms of which the aged can be given protection against inflation. This is becoming an urgent matter in the South African scene. An inflation-proof investment for the aged of South Africa is something that I believe attention should be given to without delay.

If one looks at the tax-free investments, one finds that because interest rates are dropping people are saying that they get smaller returns on tax-free investments. For example, on Post Office savings certificates one could previously invest R10 000 at 8% interest and therefore get a tax-free income of R800, whereas now one can only get a tax-free income of R700 because the interest rate has dropped. I wonder whether the hon. the Minister would not consider leaving the position as it was so that one can obtain the same amount of tax-free interest, investing a slightly larger amount to give one the same return. That, to my mind, would not be unfair because it would really not be any loss to the fisc at all. In other words, still allow a person to get his R800 interest tax-free on his Post Office savings certificate, provided of course that he then invests a slightly larger amount of money.

The same point can be made in regard to building society shares because one of the problems is that the aged are being hit by two things at the same time. They are being hit by inflation, which is running at an abnormally high rate at the moment, and they are being hit by dropping interest rates. They are therefore caught in this pincer which is squeezing the elderly people of South Africa, and I believe that something must be done to alleviate their lot, and there are a number of things that can be done.

I now want to pay a compliment to the hon. the Minister and, in particular, to the Secretary for Inland Revenue. I believe the provisions that have been drafted in respect of retirement annuities are outstanding. They are the result of very intensive consultation. They have been drafted with a high degree of skill, to try to achieve a most equitable situation, and the final result of all this consultation and draftmanship is something on which I certainly would like to congratulate all those who are responsible for it, because I believe that it was an outstanding job. In talking about retirement annuity and pension provisions I think there is really very little that one can criticize, because I think it is a major concession, a well-prepared scheme, and I certainly would not like to detract from it in any way whatsoever. One could perhaps make some suggestions. As time goes on we might consider whether people who are not receiving salaries, fees or taxable income of that kind should not also be allowed to make some provision from income in respect of their future retirement. Let us take the situation of a man who perhaps retires early and feels that he would like to make provision for his old age from what he is earning at present. I think that that kind of situation might well be catered for, but in making this suggestion I do not want to detract from what I think is an outstanding provision. I may also say, in passing, that I do not know whether hon. members have noticed how advantageous their position is in relation to this particular provision, because hon. members of this House are in the unique position of being members of a pension scheme which has been created by law. As such there is no limit on it and it is not deducted from the R3 500 which may be paid towards a retirement annuity. Therefore they are in the fortunate position that they can deduct the full amount, which is perhaps advantageous to them, an indirect benefit which they perhaps did not contemplate at the time.

Do not tell them. They may change it.

They know about it and should invest in it. The hon. member for Mooi River is very worried that the hon. the Minister might like to withdraw this benefit from hon. members of this House. I hope he will not.

Boerehater.

Mooi River-“hater”, it seems. The hon. the Minister also referred to the question of the concessions given in respect of interest on investments in property development and housing schemes, and there is something in this connection that I should like to put it to the hon. the Minister for his consideration. Should the finance rand not be marketed as an instrument for the purpose of investment in property in South Africa so as to really get the property industry going again in a meaningful fashion? In this respect I should like to put the following idea to the hon. the Minister. He will have seen in the United Kingdom budget that it is now much easier for individuals in the United Kingdom to get permission to take foreign currency out of the United Kingdom in order to buy a second home, a second home of quite generous proportions from the point of view of South African housing costs. If we could persuade people from file United Kingdom to buy second homes or holiday homes in South Africa instead of going to Spain, France or all the other places they do go to buy second homes, it would be a tremendous shot in the arm for the whole property industry in South Africa. We can offer properties in South Africa at a much lower cost than anybody in the European countries to which I have referred. This would mean that we could do quite a lot for development in South Africa. The building industry would benefit and the moribund township industry would benefit, and so I wonder whether the hon. the Minister would not consider that. There are also very real tax advantages to the foreign investor in coming here, because we do not have the French law that taxes one on three times the value of one’s property, irrespective of whether one is resident there or not. We do not do that to people who come here. If people living here do not have any income at source they are in a very advantageous tax position. Therefore I believe that this is a marketing tool which can be used, not only to create development here, but also to get people involved in the country, and the more people who get involved in South Africa the better it is for our image overseas—I should therefore like to commend this to the hon. the Minister. I should also like to commend to him the same method of investment for the building of flats in South Africa, because some kind of stimulus is needed to draw money for the building of flats in South Africa. This is one way to get new flats built. It is therefore something which could be of benefit to all of us.

In talking about the equalization of tax rates for farmers, let me come back to a request that we have made to the hon. the Minister, one might almost say, perennially, viz. can this same concession not be extended to other self-employed people? I am thinking particularly of younger professional people who, in starting off, battle and struggle and have vascillations in their practices and their incomes. To my mind this concession does seem to be something which should be considered for people other than the farming community.

The hon. the Minister then touched upon the question of fringe benefits. I want to say to him that I regret that he either did not regard it as appropriate or was not ready to make the proposals in regard to fringe benefits public during this session of Parliament so that we could debate them. I regret that because I think this is the appropriate forum for such a debate. I want to issue a word of caution that in seeking to tax fringe benefits we do not actually kill the incentive which, to my mind, is essential amongst the entrepreneur class. I know the argument is that if one reduces the tax rate one should be prepared to do without the tax-free benefits, but man, being what he is, will say that if the kind of fringe benefit which is available, quite legitimately, to a number of our best executives in South Africa at the moment, were to be destroyed, it would be very harmful to incentive. I therefore believe one must exercise a high degree of caution in respect of this matter.

I want to conclude by saying to the hon. the Minister that as far as this measure is concerned, I do not think we can be more critical than Oliver Twist and say we believe the taxpayer does want more and is entitled to more. We shall support the Second Reading of the Bill.

Mr. Speaker, the Bill which is now before this House is such an excellent piece of legislation that I should like to devote the entire half hour at my disposal to …

No!

… but having heard that reaction now, I fear I would incur the wrath of this entire House if I were to make a long speech on this exceptionally sound Bill.

This Bill is so sound that even the hon. member for Yeoville was very moderate in his criticism of it. Naturally he could do nothing else, because this is simply a brilliant piece of work arising from the tax policy which the hon. the Minister has been pursuing since 1976.

In 1976 we were going through very difficult times and the hon. the Minister of Finance was compelled to introduce a stringent budget, followed by a stringent Income Tax Bill. This was necessary because of the prevailing economic conditions. Our problem with the Opposition is that, as an Opposition usually does, they trim their sails to the wind. In 1976 the budget was a very stringent one for the higher income groups in particular, the people who earn high salaries and have high incomes. The hon. member for Yeoville, who was then the main speaker on the opposite side on the budget and the Income Tax Bill, said the following during the course of his speech (Hansard, 16 June 1976, col. 9421)—

In this connection he was referring to the higher income groups—

The amendment which the hon. member then moved, read as follows—

While the Finance Bill was under discussion this morning, the hon. member stated emphatically that he was the champion of the small man. This evening he again pleaded for the poorer strata of the population. How does one deal with such an Opposition? When there is a stringent budget and the hon. the Minister has to hit the higher income groups hard, he criticizes the hon. the Minister for doing so and in that way discouraging them from working harder. But when, on the other hand, an accommodating and excellent Income Tax Bill, such as this one, is introduced, he advocates that the hon. the Minister should take the poorer strata of the population into consideration. Particularly in these times of increased inflation, he says, the hon. the Minister should be far more accommodating to the poorer people.

I do not know what to do about this Opposition. There is no thread of consistency running through their financial policy, and as long as this is lacking, they will never be an effective Opposition. Once and for all now they must decide what they want. Admittedly the hon. member for Yeoville advocated that the hon. the Minister and his officials should endeavour to create work opportunities for the unemployed. Is it not in fact the major concession to the high income groups which we find in this year’s Income Tax Bill which encourages that entrepreneurial class, the people who have to create the employment opportunities, to do so? Through the concessions which the hon. the Minister is making to the higher income groups, he is doing precisely what the hon. member for Yeoville is asking for. He is encouraging the entrepreneurial class to create employment opportunities through investment in order to cope with unemployment. I can furnish a few figures to indicate to what a great extent the hon. the Minister is already doing so in this Bill. While the tax on a married person with an income of R28 000 was R8 800 last year, it is R8 100 this year. That is a reduction of R700. The higher the income group, the greater the tax concessions. Where can one hope to find a greater incentive for that investors’ class, the people who have to create the employment opportunities, than this major concession on income tax?

Consequently it is my considered opinion that the plans which the hon. member for Yeoville is asking to be devised, have already been devised and are already embodied in this Bill before this House. I want to thank the hon. the Minister very sincerely for that. We are up against the problem of unemployment. We must stimulate the economy. This is the way to do so. One does not stimulate the economy by means of subsidies and similar measures. The most effective method of stimulating the economy is to enable the entrepreneurial class to create employment opportunities, to encourage that class by way of tax concessions to create employment opportunities through their investments.

I do not wish to discuss the speech made by the hon. member for Yeoville any further, except to pay him the compliment of saying that he was particularly moderate this evening in his criticism of a very good Bill.

The hon. member also referred to the aged. As far as this subject is concerned the hon. member, with all due respect, stole a leaf from my book, for during the part appropriation debate—the little budget—I made a plea to the effect that we should find an entirely new approach in regard to our aged people who have to live on their own incomes. At the time I furnished figures in this connection. A person who retired 10 years ago with savings of R100 000 invested at 10% interest per annum received R10 000 per annum. In the meantime interest rates have dropped by 2%, and subsequently by a further ½%, and if we also take the depreciation of our currency into account, we find that that same person today has an effective buying power of less than R3 000. In 10 years’ time the effective buying power of his savings has therefore dropped from R10 000 to less than R3 000. This evening the hon. member for Yeoville requested the hon. the Minister to do what I had already advocated. In my opinion this is a matter to which we should give very serious attention. We shall not be able to make monetary concessions—the hon. the Minister is doing that in his budget and in this Bill before us—but we shall have to find an entirely new approach, for what with the rising inflation rate we are now experiencing and which we shall experience to an even greater extent in future, we shall really have to find an entirely new approach to retired persons who live on their own savings. The Government is not to blame for the high inflation rate. It is the result of the series of oil crises into which the oil-producing countries keep on plunging us. As an example of what could be done, I want to suggest very courteously that when the hon. the Minister and his department consider the question of capital gains tax during the recess, they should consider not making it applicable to retired persons. While a man is working, his salary is adjusted. I do not want to suggest that it is adjusted fully to the inflation rate, for if one does that, one simply causes the inflation rate to rise even further. Yet there are adjustments to a certain extent to accommodate the inflation rate. But when a person has retired, the State does nothing to accommodate a retired person in this connection. The pension of the social and civil pensioner is adjusted, and the wage or salary of the person who is still working is adjusted, but the person who has retired and who is living on his savings, receives nothing in the form of adjustments. Consequently I am advocating to the hon. the Minister and his department that if the hon. the Minister goes so far as to introduce a capital gains tax, he should at least not apply it to retired persons. This is one step which he could take, apart from the concession that greater abatements for income tax purposes could be allowed.

Mr. Speaker, the hon. member for Paarl said that the hon. the Minister had done all the right things to create employment, to create additional wealth in the entrepreneurial class encouraging them to provide work, etc. I think it is only fair to point out, as I have done on a previous occasion, that the hon. the Minister is in the singularly fortunate position that he can in terms of the Bill reduce taxes on income because, giving with the one hand, he has taken with the other hand in terms of the sales tax. He himself said that what he was striving to achieve was a correct balance between indirect and direct taxation. This is obviously a matter on which we will not reach any kind of finality this year. Obviously, it is a matter with which we are going to have to go on juggling from year to year.

I want to say that I welcome very much indeed the reductions there have been. The hon. member for Paarl mentioned that the marginal rate threshold had been pushed up while the rate itself had come down, and, obviously, we welcome that.

Are you one of the rich?

No, Sir, I am not talking of my own particular case. I am talking of the rich people in the country.

The other rich.

Yes, the hon. member for Yeoville and others. The point I am making is that the hon. the Minister finds himself in this fortunate situation because of the sales tax introduced last year. It seems to me that what we can now look forward to—and I should like the hon. the Minister to confirm this out and out—and what we are seeing in the budget now is, once again, a confirmation of the profit motive as the basic driving force that is going to develop the economy, leaving in the hands of the private person the maximum amount possible of his earned income to give him that incentive. There is no other incentive like it to make a man go out and work day and night to live for and dream about his business and to create the sort of empire that really changes the face of South Africa, creating employment and giving us the sort of growth we need. This comes, basically, from the motive of profit or from being able to retain as much of one’s earnings as one possibly can. Let me add that, when it comes to the question of capital gains tax, I really hope the hon. the Minister will consider this matter very, very seriously indeed. I know there is a considerable amount of discussion going on, but I want to say that we in this party are totally opposed to the idea of a capital gains tax because we believe this is something that can only have an inhibitory effect on the sort of growth the country needs, which must come—and I echo the hon. member for Yeoville here—from the smaller element in our society, the smaller businessman going out to build an empire and to trade his way up the ladder. Capital gains, in my opinion, are an absolutely vital part of that sort of operation.

One obviously welcomes all concessions made to farmers. I think the hon. the Minister is quite right in claiming a degree of credit for having introduced concessions for the co-operatives and for allowing farmers to spread their incomes in the way he has proposed.

There are several other matters I should like to raise. I want to tell the hon. the Minister that, as regards clause 15 which relates to the reported and unreported tax cases, I intend to move amendments to that clause, if we get to the Committee Stage at all this evening. It has been found that the complicating factor of unreported tax cases can queer the pitch of people who have planned whole set-ups in regard to their income tax based on reported tax cases. Where there are queries and one finds differences of interpretation in unreported cases in different provincial divisions, one may well find that a person who has gone to a great deal of trouble and has even sought counsel’s opinion, etc., can have his whole case upset by an unreported case. We should like to make it quite clear, as we do in our amendment, that in every case the item ought to be reported, no matter how briefly—it need only be by means of a reference—so that that body of knowledge which lies within the hands of the department can be made available to the private individual.

There is another matter I should like to raise with the hon. the Minister, and that concerns the question of allowances given to industrialists and farmers in regard to Black housing. At this moment the farming community have an advantage in that they are allowed to deduct an amount of R4 000 per dwelling unit they provide. Other people are allowed a total of R3 000 per dwelling unit or 25% of the amount spent on the dwelling unit, whichever is the lower. I want to say to the hon. the Minister that cases have been brought to my attention—and I imagine that the practice is widespread and will become more widespread in time to come—where people are being required by Administration Boards to house their employees. In the very nature of the case, when one houses one’s employees, one may not house them on outlying farms or on properties adjacent to the White areas, but the houses have to be built in the local Black area, whether it be a township or, as in the particular case I am thinking of, a homeland. One can understand quite easily that the hon. the Minister and his department are not prepared to allow a person to build up a capital asset of his own on which he is granted a tax reduction. In a situation in which someone is entitled to deduct an amount of R3 000, or 25%, from an asset which is going to pass entirely out of his hands, the only thing he can expect for having created that housing is that he will have an exclusive right to use it.

The same applies to employees at the moment in his employ. Should they leave him he will obviously have the right to replace them. However, should he go insolvent or should he move to another part of the country or anything else like that, that asset will move out of his hands. He will no longer have a right to that housing. I believe one is entitled to ask the hon. the Minister whether he would not be prepared to make an additional concession, even if it is to increase the figure to R4 000 in respect of all people so as to bring everybody in line with a figure applicable to the farming community.

I believe it is a reasonable request to make to the hon. the Minister. I hope he will give that his consideration. It is obvious that he cannot do anything about it now, or even before the end of this debate or in the Other Place. I hope he will consider it. Then he can perhaps make such a concession in the course of next year’s budget.

Then I merely want to draw to the attention of the hon. the Minister again a matter which the hon. member for Walmer referred to last year. That is the matter concerning trusts and the question of the doubt in regard to retrospectivity. I should like to state that I intend to approach the hon. the Minister’s department in connection with this. I believe there is a certain element of doubt still today, although the hon. the Minister said in his reply to the debate on a similar Bill last year—if I understood him correctly—that there was clearly no intention of a retrospective aspect being brought into this particular matter. I believe it is also accepted as one of the principles of good taxation that one should not cause assessments of this nature. I should therefore be pleased if the hon. the Minister would consider this again and perhaps give us the assurance that that is not his intention and that there can in fact not be any such retrospectivity. I hope he will tell us that it is only in cases where assessments have not yet been applied that this particular aspect might apply.

We will support the Second Reading of the Bill.

Mr. Speaker, the Bill we are now discussing contains consequential statutory amendments. These are amendments which stem from the Budget speech of the hon. the Minister. In this legislation concessions are being made which cover a very wide field, concessions in pursuance of the policy announced by the hon. the Minister. It is a Bill which certainly deserves the support of all hon. members. Consequently we are grateful that the hon. Opposition parties are supporting the Bill. We do not blame the hon. member for Yeoville for asking the hon. the Minister to make even more concessions. In fact, I think that everyone of us in this House would welcome every possible concession in regard to income tax.

This puts me in mind of an old gentleman in my part of the world who stood as a candidate for the town council. In his election campaign he launched a terrific attack on the sitting members of the town council because of the high taxes they had imposed on the inhabitants of the town. After he was elected, he became an ardent defender, on the strength of his representations for reduced taxes, of the policy that the town council should levy increased taxes to do all the things which the inhabitants of the town wanted them to do. The hon. the Minister has a difficult task in this respect. We like to ask him for concessions, but he also has certain tasks which have been entrusted to him. To carry out those tasks, he must impose taxes.

Unfortunately it is true that we were unable to foresee a few months ago when the hon. the Minister introduced his budget that there would be such a tremendous increase in the cost of transportation, of fuel and of other sources of energy.

I want to warn against our subjecting ourselves to a so-called inflation psychosis. It is a fact that costs are rising all the time and there is probably very little we can do about it, but it is dangerous if we simply accept that all the prices are going up and that all of us should therefore receive salary increases, therefore all tariffs must be raised and consequently certain things must be done. There is a great deal we can do to cause a drop in inflation. We shall discuss this further during the Third Reading, if we live that long. At this stage, however, I want to warn against our surrendering to an inflation psychosis which entails that every worker thinks he should earn more and that salaries should rise.

As for the representations made by the hon. member for Yeoville to the effect that the sales tax should perhaps be reduced, there is still a Sales Tax Amendment Bill on the Order Paper and we can discuss this matter when that Bill is before the House. Nevertheless, I think that one can say at this stage that sales tax is one of the taxes which elicits the fewest complaints from the public. It probably exerts equal pressure on everyone, although I will concede that it is more onerous for the lesser privileged people, but it is strange that I have heard the fewest complaints about sales tax than I have probably heard about any tax.

The hon. member for Paarl made an excellent speech. For a long time he was the main speaker of the NP on financial matters and he proved once again this evening that he had not lost his touch. He spoke with wisdom. I do not know whether I can say “wisdom stems from age”, because he might not like it.

Yes, you can say so if you like.

We noted with appreciation the plea which he also made for the aged. Perhaps I shall come back to that subject in the course of my speech.

We in South Africa are saddled with the situation that most of our industries have a surplus capacity. It sounds very commendable to ask the Government to grant more concessions for the provision of employment, but we must remember that we have to live with reality. As long as our industries still have that surplus capacity, I do not know whether it is all that easy to comply with the request of the hon. member for Yeoville that attention should be given to the creation of employment opportunities. All of us would like that, but what is the practical situation? The practical situation is that when any person invests, he wants to obtain the most economic proposition. How is this done? It is done by adopting a procedure which is as much capital-intensive and as little labour-intensive as possible. That is the unfortunate position we have to contend with. Everyone in industry is trying to eliminate labour today because labour is the uncertain factor. That is why the industrialist is prepared to invest a little more capital, to mechanize and to make greater profits for himself.

I said at the outset that the income tax legislation really covered a wide field and granted relief to various sectors of our economy. Let us take as an example the ordinary taxpayer. Let us consider clause 5, for example, in which provision is being made for all the concessions as far as the man in the street is concerned, and this has to be welcomed. The hon. the Minister also said in his Second Reading speech that the concessions were also being made with a view to the programme of tax reform. We are grateful for the concessions that were made, for in the months which lie ahead I think the taxpayers, the ordinary citizens, will become aware of what inherent benefits there are for them in these tax concessions.

We are very pleased that special provision is being made for the co-operative societies, particularly when amalgamations take place. Bonus payments by co-operatives are part of the co-operative movement; they are unique to the co-operative movement and since the Government has now accepted the new package agreement, we have reconfirmation that the co-operatives are entitled to pay bonuses. Consequently the co-operatives cannot be treated in the same way as the ordinary public companies. There is an inherent difference between the co-operative entrepreneurial and the company entrepreneurial form.

We are pleased about the concessions that were made for the inhabitants of Walvis Bay. The hon. the Minister proposed that these be phased out over a period of four years, in which time the inhabitants of Walvis Bay would have been able to establish themselves quite satisfactorily there.

Another important concession, I think, is the one in respect of the annuity funds and in this regard I encountered a rather strange Afrikaans word, viz. where we speak of an “retirement-funding employment”. That is really a peculiar word. I would appreciate it very much if we could find a different word for this concept. It is true that some of us, and this concerns hon. members here in particular, also have other sources of income, besides being engaged in retirement-funding employment, and we are very grateful for this concession that has been made in this respect Here we are thinking in particular of the person who has to keep his own pot on the boil and does not belong to a pension fund; he must buy his pension himself. I think it is only fair that a concession should be made to the effect that he can claim a higher abatement for the pension which he has to buy for himself.

I am also referring to the concessions which are being made to fishermen and persons in the shipping industry. I think that these will also have a beneficial effect.

As far as foreign exchange profits are concerned. I think it is appropriate for people who make profits on foreign exchange transactions to be taxed on such profits. As regards the income tax matter and the business of dealing with it in court, it is probably very difficult to conduct matters in court if one cannot refer to a previous case. We now have an amended procedure and we are making it possible for the publication of court verdicts to take place without the identity of the appellants being disclosed, and I think that will in fact facilitate the operations of the department in dealing with income tax matters in future.

Among the farmers levelling up has always been rather unpopular because farmers are subject to tremendous risks which depend on nature. Unfortunately it has frequently happened that in spite of a farmer having levelled up, he was assessed, in a certain year when he had a poor crop, on a lower income at a higher tariff. I think that all farmers should now level up as a result of this amendment, because they now enjoy the benefit of being able to level up, with the result that when they experience a poor year, they consequently pay tax on the lower income of that bad year and not on the levelled up or average income of the preceding year.

I have already paid tribute to the hon. member for Paarl who advocated that more concessions should be made to the aged. As a person whose parents are still living, I want to say that to pay tax every year is a traumatic experience for these old people. It is very difficult for them. They experience problems in completing tax returns. To them it is a nerve-racking and upsetting experience. If we can make it easy for them, I think we should do so.

We on this side of the House gladly support this Bill.

Mr. Speaker, the hon. member for Malmesbury supported this Bill in an eloquent manner. We support this Bill and of course we also welcome the concessions being made, but we feel that there is much more that can be done in these days of rising costs. I shall refer to these matters again later.

†I do not think that when the hon. the Minister announced the concessions in the course of his budget speech, he could ever have anticipated the rise in the fuel costs and other costs to the extent they have risen. Obviously the hon. the Minister anticipated a certain rise and therefore he based these concessions on that anticipated rise in order to assist people. However, he could never have anticipated the extent of the rise in the costs, because I think the increases in the costs, especially in relation to fuel, have been beyond the anticipation of most people in the Republic and even outside the Republic. I therefore think that the hon. the Minister will, in all fairness, have to consider further concessions in order to assist people, because these extraordinary increases could not have been foreseen by anyone, not even, as I have said, by the hon. the Minister himself when he actually introduced the budget a few months ago.

I now want to turn to capital gains tax. I had hoped that I would not have had to raise this subject I thought that I would let sleeping dogs lie, but the plea made by the hon. member for Paarl about people in a certain age category—he seems to be lodging a plea on his own behalf there—seems to have prodded a hornets nest as far as capital gains tax is concerned. I cannot think of anything that would discourage an entrepreneur as much as capital gains tax. We have a young and growing economy, and capital gains tax should not be introduced. I think the hon. the Minister has taken some positive steps, in relation to the financial rand, for example, which has, as one has read in the newspapers, served as a form of stimulus to get money into the country, to get people to invest money here, to expand commerce and industry. If one were to introduce capital gains tax at any point of time, however, now or in the near future, one would offset all the benefits one may have had from the financial rand and would be damaging a young and growing economy, and that we cannot afford at this point in time.

The department has furnished us with a detailed explanatory memorandum, and for that we would like to express our appreciation. One can hear from the length of the speeches that the detailed explanations in the explanatory memorandum have served to shorten the debate, because most of us understand this legislation far better than we could have if we did not have the explanatory memorandum. So I want to commend the department on the detail they went into in this explanatory memorandum.

The hon. the Minister was in the fortunate position of being able to make many concessions because there was more income than he had anticipated. The revenue from gold, for example, and the money obtained from the general sales tax exceeded even his most optimistic anticipations. I think it would not be unfair to say that the anticipation of more revenue from gold, from other minerals and the general sales tax will in the present financial year be even more than the amount the Minister anticipated when he introduced his budget. So he has even more disposable income to deal with. We welcome the concessions from the budget which are now being introduced in this Bill. We feel, however, that far more can be done for the less privileged people in our community who are battling to make ends meet with the rising costs, as I explained earlier.

I now want to turn to the question of married women. I know that here I will have the support of the hon. member for Houghton because she has been making this plea for very many years. [Interjections.] She talks about it every year. When the hon. member for Houghton has a good point, she certainly has a good point, and this is one of her particularly good points, figuratively speaking. I want to say that the concessions granted do not solve the problems. There are extremely competent married women earning substantial salaries, and when their incomes are added to their husband’s income, the tax rate is such that they claim that there is no inducement for them to work. It is at great investment cost that these women have been given expertise in various fields and they should therefore be kept active in the economy. When they stop working, there is a loss of skill, a loss of the large investment in their training and a loss of extreme efficiency. The hon. the Minister must simply agree to tax husbands and wives separately. The hon. the Minister must strike a blow for the women of South Africa. I think he would find the men supporting him all the way if he were to do that.

Does your wife still beat you?

The hon. member for Mooi River seems to have this on his brain. I think earlier on today someone asked him whether he still beats his wife. He said that he only beats her occasionally when she deserves it.

There is another category of people I want to make an appeal for, and that is the senior officials who have specialized knowledge, and when they retire their specialized knowledge should still be used. To encourage these people to do specialized work, these additional earnings should be subject to some tax concessions. I should like to mention one example, namely Mr. Browne, the former Secretary for Finance. He is doing an investigation into, amongst other things, the financing of local authorities. I think that more retired officials should be encouraged to do these special investigations when officials, still in service, are under too much pressure to conduct detailed investigations. This will contribute to the efficiency of the public service. I hold the view that attractive tax concessions would serve as an encouragement to highly trained officials to still play a special part. They may well be prepared to do the work without a special concession, but I believe that they are entitled to that form of concession. I see, in the Bill, that there is a concession in clause 10, namely a deduction in respect of machinery. In clause 9 employees’ training allowances are dealt with. These concessions are naturally welcome, but in these days of unemployment, will the hon. the Minister not consider encouraging employers to create job opportunities? If one can give concessions on machines and for training schemes, why can concessions not be given to employers for every extra job that they created? This concession could act as a very real incentive to alleviate the unemployment situation. The hon. the Minister has a very special position in this regard and must assure us that he will do, or have done, an urgent in-depth investigation. [Interjections.]

Clause 13 of the Bill deals with foreign exchange transactions. Importers who have been dealing with overseas suppliers throughout their lifetimes must be given every encouragement to obtain extended terms in the form of suppliers’ credit. This is tantamount to their obtaining a short-term foreign loan. These importers must be encouraged to use overseas credit facilities instead of using their South African facilities. Here again the hon. the Minister must ensure that tax concessions are such that importers can see a distinct advantage in overseas suppliers’ credit. With all the enormous projects that we have in the pipeline in South Africa, I have no doubt that we shall find avenues of finance for the local finance that will then be available from banks and other financial institutions.

During the course of his speech the hon. the Minister mentioned the decision to exempt from tax the interest on foreign loans raised from housing, this being a most welcome concession indeed. It should do much for housing, and at the same time it should assist us with foreign loans. The next step in this direction is to exempt interest on house loans from taxable income in the Republic of South Africa. This would do much to stimulate the economy. The hon. the Minister and his colleague, the hon. the Minister of Economic Affairs, must promise that in these times they will keep a specially watchful eye on the motor industry, and if the motor industry does have problems, the hon. the Minister must be quick to come to its assistance, because it might well have problems in view of the fuel crisis that is being experienced throughout the world. We welcome this measure and shall not oppose it.

Mr. Speaker, this evening we are discussing a Bill emanating from the hon. the Minister’s budget speech. I have to say at once that there are two steps that he has taken that I welcome, though with certain reservations, because I do not believe they have gone far enough, but they have certainly introduced some improvements. The first is the step that has already been mentioned by the hon. member for Walmer, and I assure him that I am appreciative of any support that we get, in this House full of male chauvinists, on the issue of separate taxation for married women. So if any other gentlemen would like to join in this fight, I would be very happy to have them. In the course of his budget speech the hon. the Minister gave us poetic and biblical references, one of which was a reference to Samson. It is not my intention to act as Delilah this evening, but I must say that the hon. the Minister has not solved the problem which he thinks he has solved in so far as married women are concerned. What has he done? First of all he has given us what I believe to be a very ungenerous increase in the deduction which is allowed on married women’s earnings, having only raised this amount from R750 to R900. I think the hon. the Minister should discuss this matter with his own wife, because he will find that the increase does not even begin to cover the additional amount that women require today if they are to go out to work, the amount needed for their domestic staff so as to enable them to go out to work. They also have to find money for additional clothing and for transport, etc. This is therefore really a ungenerous amount, and I wonder how the hon. the Minister thought that he could possibly satisfy the married working woman with this additional exemption.

It is true however, that the marginal rate has been changed, and that certainly is an improvement. I believe that that would probably have the most effect in assisting married working women. This figure is now lowered to approximately 55%. The level at which the marginal rate starts applying has also been raised to R30 000 per annum from R28 000 per annum. That does help, but I wonder whether the hon. the Minister would not consider widening the tax bracket, because I feel that that would really bring about the greatest advantage to a married working woman. It is no good her earning a few extra thousand if the tax bracket is raised by leaps of R1 000, because in no time at all the combined earnings of the woman and her husband put the husband in a very much higher bracket.

I wonder whether the hon. the Minister would not consider that. We do not really know exactly what effect separate taxation has on revenue in its entirety. The report, printed in 1976, on the Inquiry into the Taxation of the Income of Married Women, which was conducted by the Department of Inland Revenue in co-operation with the Standing Commission of Inquiry with regard to the Taxation Policy of the Republic, stated on page 22 that the whole point of the effect of tax on the earnings of married women and whether it does or does not keep them from going out to earn money, is debatable because we have not really made a proper study in this regard. We certainly do not know what additional revenue will come to the fiscus if married women with professional qualifications, who therefore would be in the higher income bracket, could be persuaded to re-enter the labour market. I think that the percentage of women who are at the moment married and working is in the neighbourhood of 35%, which is low in comparison with other countries. I really think there is more to be gained by this than perhaps the hon. the Minister and his department are prepared at this time to admit.

Another change the hon. the Minister has suggested in his budget speech and which has been introduced by another measure, is the change in Black taxation. As we pointed out during the relevant debate, there is still a very considerable disparity in the tax rates applicable to Blacks and those applicable to Whites, Indians and Coloured people. I think the hon. the Minister must admit that there can be no justification in principle in levying different tax rates on a racial basis. I hope the hon. the Minister is going to assure us that next year he is going to do his best to wipe out this disparity altogether. At the present stage Black people start paying tax when they receive an income of R1 200. What is more, the married Black man gets no rebate for being married and he gets no rebate for children, dependants, insurance or medical expenses. None of the rebates the Whites, the Coloureds and Asians get are applicable to Blacks. They do not even get the rebate applicable to people of other races over the age of 60, which is an additional benefit that age group enjoy. I hope the hon. the Minister will be able to assure us that the existing disparity is going to be wiped out as soon as possible. At the present rates a married man with two children only starts paying tax when he has an income of, I think, R3 900, which is of course not the case with the Blacks who start paying at R1 200.

The other concession the hon. the Minister has made which I welcome very much is his concession to divorced people. If a woman is divorced—this applies to men and women, but of course affects women— she will be taxed as a married person providing her earnings are spent mainly, or wholly, in the support of dependent children. I think that that is a generous and very welcome change the hon. the Minister has introduced.

The only other thing I want to say is that the punishing indirect taxes being paid at the present stage are, as the hon. the member for Yeoville has pointed out, felt most keenly by the lower income groups in South Africa, and of course most of all by Black people in this country. Would it not be possible for the hon. the Minister to consider removing the general sales tax on foodstuffs, staple foodstuffs any way? If necessary, he can raise to 5% the tax on other articles, but he should remove altogether the sales tax on foodstuffs. That is the one budget item which is elastic. Items such as transport and rent are not elastic and therefore the only real elasticity lies in the food bill of the family every month. This is the very worst part of the family budget to be penalized, because quite obviously it affects the nutritional standards of the entire country and thereby, I might add, if I have to raise an economic argument, the general productivity level of the community. I wonder if the hon. the Minister will not consider, as I say, raising the tax on other items if necessary, but removing it altogether on foodstuffs. I believe there is no tax on foodstuffs in Britain; none at all.

That is a very popular argument.

Well, it is a good popular argument. I hope the hon. member for Losberg will stand up and support me on this. I hope he will try to persuade the hon. the Minister to do that. I believe most people in this country would recognize the equity of doing such a thing, the equity, as I say, of raising the sales tax, if necessary, to 5% on other items and removing it entirely on all foodstuffs; certainly on all staple foodstuffs. I am not talking now about imported, expensive foodstuffs, which are obviously luxury articles. I am talking about ordinary staple foodstuffs.

With those words we support the Second Reading of the Bill.

Mr. Speaker, I should like to deal quite briefly with only a few matters. I believe the subject matter of taxation has been argued at length. However, there are still some matters which, I think, should be drawn to the attention of the hon. the Minister.

It is quite clear that when the hon. the Minister of Finance submitted his budget to this House, on 28 March this year, we all had high hopes. We had high hopes of a thriving economy, of an expected growth rate of something like 3,5% to 4%. We had a budget based on the prospect of putting cash into the pockets of the consumer. We had the high hope of more liquid cash to allow enterprises to extend, at the same time creating more employment opportunities. I believe, however, that the hon. the Minister will be the first one to admit that the position has changed quite radically since the end of March. One of the great problems we have to face today is the question of the enormous rise in the price of petrol, and the negative influence that will have on the hon. the Minister’s entire calculation. Even though the general sales tax has brought in far more than the hon. the Minister originally anticipated, it is still a question now of unemployment and the rate of inflation being of such a nature that they completely neutralize the benefits derived by the Government from the introduction of the general sales tax.

As the hon. member for Yeoville correctly pointed out, we have to create new job opportunities because this is a factor which is vital to our economy. Remarkably enough this very aspect seems to be one of the major deficiencies in the hon. the Minister’s budget.

Furthermore, I believe I should draw the attention of the hon. the Minister to the plight of local authorities throughout South Africa. It is true that the Browne Commission has been appointed and that it will make recommendations regarding possible relief to local authorities.

What has that got to do with the Bill?

It has a bearing on the Bill in so far as it relates to the hon. the Minister’s references to the economy and the rate of inflation. I merely want to draw the hon. the Minister’s attention to the fact that local authorities are now all having to frame their budgets in such a way that they will have no alternative but to increase rates all round in order to balance their budgets, or else they would not be in a position to employ more people, something that would lead to further unemployment. That means that unless the hon. the Minister should request the Browne Commission to do something urgent in order to bring some relief to local authorities it will have a vital effect on the entire economy of South Africa. We must bear in mind that vast numbers of people are employed by local authorities. Furthermore, almost everybody has to pay rates and taxes to local authorities, and should these rates and taxes be increased, it would have a further negative effect on the entire economy of the country.

There are a number of other matters I should like to touch upon briefly. Something which, I believe, is a matter of particular importance, is the matter which is being dealt with in clause 6 of the Bill, viz. the matter of Walvis Bay. The amount mentioned in the proposed section 6quin(l)(d), and referred to as the “Walvis Bay rebate”, is something about which we are delighted. At the moment, I believe, the inhabitants of Walvis Bay find themselves in a rather peculiar situation. Walvis Bay is a town far beyond the boundaries of the Republic of South Africa, a town which is to undergo various changes with regard to legislation and control. However, since 1977, Walvis Bay has been completely under the control of the Cape Provincial Administration in so far as its provincial services are concerned, and now also as far as taxation is concerned. Therefore, I believe it is proper that, since there has to be a taxation adjustment, those who are paying less should have the benefit of paying less, and those who are paying more, if they qualify for it by being in Walvis Bay for a period of 183 days the year, and if they are resident there on the date of taxation, should qualify for the rebate of 25% over a period of four years.

I think this should also be related to the rebates, and I want to ask the hon. the Minister to again have a look at the rebates he has given and at the reduction in ship tonnage from 1 000 tons to 200 tons are concerned, because the people of Walvis Bay are, as a community, are almost solely dependent on the fishing industry for their livelihood. Hon. members who had the benefit of touring Walvis Bay a couple of weeks ago will bear me out that it is alarming to see 400 vacant houses in Walvis Bay, and those people are extremely worried about their future too. Their economy sorely needs a boost.

I think the hon. the Minister might like to give attention to whether, although companies are exempt from this particular aspect of taxation, this provision for the writing off of ships for tax purposes cannot be applied to those in Walvis Bay. The hon. the Minister will, of course, have to consider whether the people concerned are residents of Walvis Bay and whether the companies are resident companies, or whether they are companies based in South Africa which are merely involved in the fishing industry in Walvis Bay. Since they cannot meet their quotas, there is a very real need for assistance, and I think the hon. the Minister for Economic Affairs— who unfortunately is not in the House at present—had personal talks with those people. I am not aware of what the discussions entailed, but I think the hon. the Minister has probably conveyed the information to the Cabinet, and therefore the hon. the Minister of Finance should be well aware of what the problems are.

The hon. member for Houghton referred to the question of Black taxation. I want to support her very strongly on the removal of discrimination in so far as Black taxation is concerned. In his speech today the hon. the Minister of Finance told the House that the raising of taxation to a R1 000 income per year limit will result in removing something like 210 000 provisional taxpayers from the roll. This leaves room for a number of Blacks whom I think would now be able to fit into this category. I think the whole administration of taxation throughout South Africa could now very neatly absorb the Black population and place them on the same basis as that on which the Whites, Coloureds and Indians are paying, particularly in regard to the rebates that are available to them. I do not think the hon. the Minister of Finance’s department does the actual tax calculation—I imagine this is done through the Department of Plural Relations—but I think I am right in saying, and the hon. the Minister may confirm this, that all the rebates in terms of clause 5, to which he has referred, are not, in fact, applicable to the Black population. In fact, the whole basis of taxation is different. Although they may have the benefit of what the hon. member for Houghton has so long been pleading for, namely separate taxation for men and women, they are far from being in the same category as Whites in many respects. Because they are taxed as single people, they do not get the benefit of rebates for children, nor the benefits which married people enjoy. I therefore think that to at least narrow the gap, the rebate should also apply to them, and perhaps the hon. the Minister of Finance could bring pressure to bear on the hon. the Minister of Plural Relations to put this on a similar basis.

The other difficulty, of course, is the one faced by the aged, and here the hon. the Minister has granted permission for the rebate to be increased from R700 to R1 000 for those who are over 60 years of age. I do not think there are people who are suffering more than the aged in South Africa today. We have had little joy from the Government for those aged people who fall under the Department of Community Development. They have had a very unsympathetic hearing from the Government which has stated that those whose incomes put them in the economic class for housing, should be made to move to economic schemes.

At the same time Government members all say they believe and accept that people should remain in their own environment so as to give them essentially needed security in their advanced years. That, however, is lacking. So unless the hon. the Minister can play a part in increasing the rebates to those who do pay tax, so as to offset inflation, the high cost of living and the continual increase in rents that they have to face, those people will face the impossible task of making ends meet. In this House I quoted a letter from a lady who she said that she sets aside R30 per month for food. In other words, she is spending R1 a day on three meals. How can any person live like that? These are the cases of hardship which the hon. the Minister must bear in mind.

With regard to clause 15—and I think the hon. member for Mooi River also referred to it—there is the question of the publication of judgments in taxation cases to assist others who have similar difficulties and to create a body of case law so that precedents can be established to guide others and to prevent them falling into similar traps because, as one knows, one must pay the Receiver of Revenue first and argue afterwards. I have no objection to the facts of the case being published, but there may be a certain amount of merit in not publishing the names of the parties, if only for their own protection, because there may be those who are in the millionaire class who will become the target for blackmailers if their names are published, and whose children will become the target for kidnappers. That may be one good reason for not publishing names. But there is a very simple solution to the whole matter, namely that the judge of the Appeal Court can authorize the facts of the case to be disclosed in law reports without mentioning the names of the parties concerned. That, I think, would satisfy all the parties concerned.

Lastly, I want to refer to the capital gains tax. Hon. members in these benches have expressed great reservations about this tax. I think that in some ways the capital gains tax conjures up memories to many of us of the fixed property profits tax which was not a very nice form of taxation. The kind of capital gains tax which is applied overseas, for example in Britain, where profits are taxed under certain conditions, may well be something that could be investigated, I think the Franzsen Commission in fact made certain recommendations in this respect [Interjections.]

You do not know what you are talking about.

We are not in a position to react to the question of whether a capital gains tax should be introduced or not; until such time as the hon. the Minister publishes the required Bill and until such time as we in the PFP have had a look at the Bill to see what its implications are, we will not be able to say what our policy will be with regard to that particular form of taxation.

Order! The hon. member has also had sufficient opportunity to speak about the capital gains tax and he must now return to the Bill.

I have only referred to it because the hon. the Minister himself referred to it in the last part of his speech this afternoon. I think we must view it with great circumspection because, obviously, it would have an effect on the entire budget. It is a question of whether the general sales tax itself has to be adjusted. It is also a question of how the general taxation for the running of the country is to be obtained; and I think that we in this party still believe that it is the rich who should be taxed. They are the people who should pay, and we should protect the poor wherever we can. For example, with regard to the general sales tax, there is no better case to be made out at present than to ask the hon. the Minister to consider removing the 4% sales tax on essential foodstuffs.

Mr. Speaker, I was most interested to hear the hon. member for Hillbrow stating categorically that the rich must be taxed and I was also very interested to hear that the PFP were prepared to give a capital gains tax some sort of a chance in that they were prepared to look at it, which somewhat surprised me. Perhaps I could ask the hon. member for Hillbrow just how far they are prepared to go in this taxing of the rich. For instance, are they prepared to consider a wealth tax? Would the hon. member be prepared to consider a wealth tax? I am not getting an answer.

Order! The hon. member can discuss that in the Third Reading.

Certainly, Mr. Speaker. I wish to deal with a few of the points the hon. member for Hillbrow raised.

Would you like to have a tax on second-hand motor-cars?

We do actually have a tax on that already. I should firstly like to deal with what the hon. member for Hillbrow said with regard to the South West African situation. As I understand the position, certain concessions were given to Walvis Bay residents to enable them to catch up with the South African rate of taxation gradually rather than having it hit them all in one smack. Is that correct?

No …

As I also understand the situation, the South African tax rates have now been reduced fairly considerably in the latest tax proposals. What has therefore happened is that the need for this particular provision has really almost disappeared, because the South West African rates and the South African rates are now not so very different. I should therefore like the hon. the Minister to give us some indication of what his feelings are in this regard.

My real reason for getting to my feet in the Second Reading of the Income Tax Bill is to discuss clause 11. In the explanatory memorandum, which was kindly handed out by the hon. the Minister, we find that the adjustable cost price of certain South African foreign-going and other ships may be deducted from income in a certain manner, which is then dealt with. In terms of section 14(2)(d) a “foreign-going” ship also means—

Fairly clearly this means that a South African foreign-going whaling boat is entitled to certain concessions in terms of the Income Tax Act, concessions in terms of which a company that owns a particular whaling boat is going to be able to depreciate its product rather more quickly than it would otherwise have been able to do and to deduct this from its income.

During the debate on the Foreign Affairs Vote, the hon. member for Pietermaritzburg South raised the question of the pirate whaling ship that we know of—perhaps there are more than one—operating out of South African ports with a South African owner. At that stage it was suggested to him that perhaps the question should rather be raised in the debate on the Vote of the hon. the Minister of Economic Affairs. However, I am raising it now because it directly applies to this measure. It seems to me fairly obvious that the owner of such a pirate whaling ship is going to be able to claim this sort of tax deduction, but we in these benches do not believe that such a person should be able to claim these tax deductions. In fact, we understand that the particular person concerned, a certain Mr. Behr, mentioned by the hon. member for Pietermaritzburg-South, has left South Africa and is now apparently living in a rather expensive house in London which was picketed last week by people who are in favour of the whales not being wiped out. The hon. the Minister obviously knows what I am driving at. I do not think any pirate operator should be able to gain advantage from this clause, while a genuine whaling operator, of course, should be able to. I therefore intend to move the following amendment at Committee Stage—

I think this is really self-explanatory. We had considered substituting “the Department of Sea Fisheries” for the “International Whaling Commission”, but of course it is entirely possible that such a whaling ship could be operating in any waters, and the South African Department of Fisheries might not be aware of any contraventions of the International Whaling Commission’s code. I therefore very seriously commend this amendment to the hon. the Minister’s attention. I personally have my doubts as to whether we shall be able to get to clause 11 in the Committee Stage. If we are not able to do so, I should like the hon. the Minister to give this his serious thought and consideration with a view to inserting similar wording at some stage in order to stop a pirate whaling vessel being able to take advantage of this relaxation of the tax legislation.

Mr. Speaker, I rise with one aim only and that is to make a short, I hope forceful, and I trust successful, appeal on behalf of the construction industry in South Africa in which I have declared my own interest on a number of occasions. It concerns the machinery initial allowance of 25% which in former years was laid down by law and which was permitted in regard to machinery used for manufacturing or similar purposes. From 30 June this year, this reduction is going to be abolished with regard to those similar activities. This includes the activities of the construction industry to an important degree. This will of course have the practical effect that it will be a less attractive proposition for firms in this industry to replace their worn-out plant with plant in a good condition. The result of this will be that more money will be spent on maintenance and more time will be lost through the plant not being in operation. Ultimately these expenses will, of course, also be recovered for tax purposes. It is doubtful whether the Government will receive any more tax as a result of these changes, whereas the service which the industry will be able to render its clients will be poorer.

I do not intend taking up much of the time of the House in this regard. We debated the matter last year and the hon. the Minister is well acquainted with the arguments advanced on both sides of the House. There has also been correspondence with his department. I am pleased to see that the final word of his department, given fairly recently—about a month ago—was that this matter would be given consideration. I conclude by renewing my plea that that consideration should be very thorough and that it will lead very promptly to the concession permitted in regard to machinery used in the manufacturing process again being permitted in these construction processes as well.

Mr. Speaker, it is a pleasure for me to thank hon. members on both sides of the House once again for their support of this Bill. There were, of course, certain exceptions, but in general the Bill enjoys the support of the whole House. I want to say at once that if there are hon. members that did not receive the explanatory memorandum in good time, I apologize. Originally the plan was that this Bill would not be dealt with today. I do not think it was possible for the printers to print the explanatory memorandum in time. I therefore apologize once again if some hon. members do not have the explanatory memorandum before them.

†I should just like to mention immediately that I am going to move an amendment in the Committee Stage aimed at removing certain textual anomalies between the Afrikaans and English texts in clause 13. I shall make this amendment available to those hon. members who are likely to deal with it and hope that it will have the support of the House.

I should like to begin with the speech of the hon. member for Houghton. She raised the question of the taxation of married women and also of the tax rates applicable to Blacks. I think we have brought about some improvement in the matter of taxation as far as married women are concerned. I think she will concede that. There is an increase in the deduction although I agree that R750 to R900 is not all that epoch-making, as they say on the Continent.

It is miserable.

However, I think the marginal rate reduction is more significant I also think that the much more gradual diminution which now operates in respect of the abatements generally, is also important. If I remember correctly, that adjustment alone means a loss in tax revenue of nearly R200 million in a full year. The hon. member also suggested and asked whether we would widen the tax brackets. That is a perfectly reasonable request. The only constraining matter there is of course how much revenue one is going to lose. But I would point out to the hon. member that there has been some advance in this respect, particularly above income levels of R16 000. There has tended to be a certain widening there in recent years. It is a matter that the taxation commission constantly bears in mind and, depending on circumstances, if we can make more headway there we will do so. As I have said the only restrictive factor is of course the effect on the revenue earned.

The hon. member for Houghton also mentioned the tax on divorced persons, separated persons and so on, with I think some approval and then asked whether we could consider removing the general sales tax on foodstuffs. Again this is a matter which is certainly important. In a country like Britain they did that. They have of course a VAT—value added tax—which is technically a bit different but in many respects not all that different from the general sales tax. In the latest budget the new Chancellor of the Exchequer has in fact put up the value added tax to 15%. It is extremely high. He has done that in order to reduce income tax as was promised in the election campaign. But that does not affect us. The point is that once you start exempting important items, then in the world in which we live you will almost certainly have the pressure on you to put up the tax rate, and it may be that if we were to exempt foodstuffs from our tax, that we possibly might have to put up the rate by, say, 2% to 6%. But then also you will get a tremendous pressure from other quarters to exempt other things. So whilst I take the point and agree no one particularly wants to tax foodstuffs, the implications as a whole will be fairly far-reaching. In any event, one wonders whether the tax-paying public in the end will really be better off than they perhaps will be where you try to keep what is by all conventional standards a low rate of tax on a very wide range of goods. That is the way we see it at the moment, but as I say, these are matters that we constantly keep under review and we will have to see what is possible there.

The hon. member also referred to taxation of Blacks and the hon. member for Hillbrow did likewise. This is not strictly before us, but what we are trying to do, as I said in my budget speech, is to try to bring about fairly radical adjustments there, improvements in the whole tax system, but we will have to do this over a period of three years. I might say that the R33 million—the figure that it will cost us this year to bring about the improvements that we have proposed—amounts to about one-third of the total revenue from that source of income tax in a year. So R33 million is a large proportion of the revenue earned from that particular tax on those people. However, that is something which we will certainly talk about further because it is something we do want to improve on as we go along.

The hon. member for Yeoville raised a few points. Among other things, he talked about fringe benefits. Fringe benefits will quite clearly still be debated in the House. We are not going to take any sudden decision on that. As I have already announced, proposals will be published in the Gazette, and only after all interested parties have had a thorough opportunity to discuss the matter with us and air their views and after the matter has been fully discussed here, will we contemplate coming to a decision.

As regards capital gains tax—the hon. members for Yeoville, Walmer and Hillbrow also referred to this—I would like to say that there is no intention at all on our part to attack productive capital used in commerce and industry, mining and farming. It is not a tax on capital in that sense. It is more a revised concept of taxable income.

We know that story.

Well, Sir, let us see what comes out of this. We must not jump to conclusions. After all, the government has not even committed itself to such a tax at all. We are merely looking at the possibilities from the point of view of trying to broaden the whole tax base still further so that tax rates in respect of important individual taxes can be reduced or kept to a minimum. It is part of a genuine attempt at tax reform, and I hope it will be seen in that light.

The hon. member for Yeoville suggested too that, in addition to his pension contributions under the parliamentary scheme, an MP may contribute up to R3 500 to a retirement annuity fund and have it deducted for tax purposes, if I understood him correctly. I do not think that that is quite correct. His office as MP is what we call here “retirement-funding employment”, in terms of clause 3(l)(d) on page 4 of the Bill. This means, when read with the amended section 11(n)(aa), that he may claim retirement annuity fund contributions of R3 500 less his contributions to the parliamentary scheme, or R1 750, whichever is the greater.

Look at the amendment to section 1l(k).

Yes, but if one looks at the provisions I referred to together, it is in fact a question of claiming a retirement annuity fund contribution of R3 500 less the contribution to the parliamentary scheme, or R1 750.

Mr. Speaker, may I ask the hon. the Minister whether he does not regard the parliamentary pension scheme as being a fund established by law in terms of section 11(k) as amended by clause 8(1)(a)? That specifically provides—

In other words, if it is established by law, it may exceed that amount.

I wonder if we can perhaps come back to this in the Committee Stage, because I do not want to go into too much detail now.

It is important to a lot of people sitting here.

Yes. In any event, we will come back to it.

When the budget was introduced, the hon. member for Yeoville said with regard to the rate of inflation that I could probably not have foreseen the high rate of inflation that was likely to emerge. I drew the conclusion from that that I should now be prepared to make even bigger concessions than those I have made. The hon. member will remember that tax concessions alone in the budget amounted to R762 million. Now the hon. member wants me to go further, as does the hon. member for Walmer, who of course has the motor industry in mind. One must, however, remember that since the budget was introduced the very serious oil problem has emerged, which certainly places pressure on the Exchequer. About that there can be no question. The hon. Minister of Economic Affairs is trying to keep the oil and petrol prices as low as he can in the light of the extremely difficult situation that has emerged and over which we have no control. In increasing those prices, we have in fact agreed between us to reduce the excise duty and allow a rebate in respect of it to the extent of approximately R130 million this financial year. This came after the budget. It is a substantial amount to allow for after one has already introduced one’s budget. That is just one item. Then we also have a very valuable undertaking in Sasol, and we cannot foresee precisely what the demands may be on the taxpayer in this respect.

We have been doing everything possible to finance Sasol in an extremely down-to-earth, practical and sensible way, including drawing on the private sector in a substantial way. However, I believe that the hon. member will agree that any Government, any Minister of Finance, has to bear in mind the uncertainty in this whole situation. Fortunately for us, we have experienced a very substantial increase in the gold price. We also, of course, have to take account of the fact that inflation hits the gold mines very hard. During the last couple of years gold mining costs have risen very substantially. There is yet another factor. The hon. member will know that gold mines, if they are to develop, have to spend a good deal of capital, and they are entitled to write off their capital. We have to bear this in mind. We do not know precisely the magnitude of those figures. I am merely pointing out that there are always uncertainties facing us. What the final outcome thereof on the revenue-earning capacity of the State will be is very difficult to tell. Therefore I must obviously be very careful about making further concessions immediately, over and above those I have already made. My first duty is surely to attempt to balance the budget as far as possible. It is as simple as that, although under these conditions it is not quite as simple as it sounds.

*The hon. member for Paarl also referred to the elderly. This is something he has done a number of times in this House. Earlier this year, too, he made a plea for the elderly. This is a matter which enjoys considerable attention by the Government and which will certainly enjoy a great deal more attention during the present financial year because the rate of inflation could rise further under present circumstances. The hon. member said that the entrepreneuring class should be placed in a position to provide employment opportunities. That is absolutely correct. If one is able to do so, we have the solution. That is indeed what the budget envisages doing. The hon. member perceived this and I thank him for the friendly words he addressed to me.

I agree with the hon. member for Malmesbury when he says that the hon. member for Paarl was really on form this evening. The hon. member for Paarl has not lost the art of making a sound speech on finance. He made a very impressive analysis of our approach in the budget to the important question of the encouragement of employment and provision of work, and particularly of the important role of the private sector. I thank him for that.

†The hon. member for Yeoville may be quite sure that we are constantly watching the position of the aged. I think our record in that respect is a very sound one indeed. Within the constraints of the capacity of the State to pay, I believe we have really not done very badly in this respect. It is a question of pensions and the increases made available in pensions. It is a question of housing facilities. It is a question of tax. In fact, we have made certain concessions in the taxes paid by people over the age of 60 and who earn a limited income. I believe all these things do add up to a fairly significant benefit.

I now come to the hon. member for Mooi River. I have kept him waiting, since I mentioned him earlier. The hon. member spoke about the possibilities of increasing the housing allowances for workers other than farm employees. He mentioned the possibility of increasing it to R4 000. This is a matter for consideration, and we will give more consideration to that during the parliamentary recess. The allowances does, of course, already to some extent cut across the principle that capital expenditure is not an allowable deduction. I think one should move carefully before entirely abandoning that principle or carrying it too far.

It moves out of your hands. That is the point I was making.

Where for instance you supply housing in an area where you do not own the land, and you move away, what happens to the property? You had a right to use it when you were there, but you have now moved away and do not even have a right to use it later. I take this point. I would say that normally the R3 000 would go a long way in assisting the employer. Of course it was not the intention that we could necessarily cover the total cost of this type of facility. I have, however, taken the hon. member’s point and we will see what can possibly be done.

With regard to clause 15, it was proposed in the original draft Bill that the Secretary or his representative be empowered to make use of unreported special court judgments. I must explain that this has been deleted from the Bill before the House. It was done quite recently and it is just possible that the draft Bill which the hon. member had before him still contained that provision, in which case I am sorry that he has been misled, but as we thought that we need to think a little bit more about that, it was deleted.

The hon. member also referred to section 103. The position is that old assessments will not be reopened in this respect, but the department may in certain appropriate circumstances and in its judgment apply the section as amended last year in subsequent tax years to schemes carried out before the Act was amended. That could happen. But we are not going to reopen old assessments in this respect. I hope that goes some way towards meeting the hon. member’s problem.

*The hon. member for Walmer asked for further concessions. I think I dealt with that aspect when I replied to the hon. member for Yeoville.

With regard to the question of the provision of adequate employment opportunities in the motor industry, I am of the opinion that the most effective approach to that problem is, of course, to ensure, if possible, that there is an adequate growth rate in the economy as a whole. If that can be achieved, and if the growth rate can reach 4%, many of these problems will be solved to a large extent. I think the hon. member for Walmer would agree with this. At the moment I am still confident that we can achieve this.

†Our aim, certainly still is to go for growth. I think nothing that has happened in relation to the oil problem, which is a very serious problem and to which attention is given, is diverting us from our whole policy aim of attempting to strengthen the growth of the economy. We certainly hope, unless certain other very serious things occur, that we may still be able to reach a 4% growth rate, if not by the end of the year, certainly within the next year. At the moment I think we have a very good chance to do so.

The hon. member for East London North raised the question of residents of Walvis Bay. The taxpayers in Walvis Bay will now pay the lesser of the two taxes, that is to say the current 1980 South African rates, or current South African rates less Walvis Bay rebates. It is a question of which is the lesser. I think that is how it will actually work out in practice. It is a temporary measure to give them relief for at least a few years in order to give them a chance to adjust to the new situation, over which they really have no control.

The hon. member also raised the question of whaling boats and pirate whaling boats. The opinion of the Secretary for Inland Revenue is that all fishing vessels which qualify will, of course, enjoy a shipping concession. That is from the revenue point of view. The Secretary for Inland Revenue has to make his judgment on the financial statements involved and will find it very difficult to separate, one might say, the good people from the bad in this respect. But the whole question of control would, of course, rest more directly with the Department of Commerce and this department will certainly look at this matter. There is the question of licensing, etc., involved, and I am quite sure that that will very seriously be looked at and is probably being looked at this moment in the light of the publicity which this matter has already received. However, from the tax point of view, I think the hon. member will agree that it is very difficult for us to make an exception in this regard.

*The hon. member for Parktown made a plea on behalf of the construction industry, concerning the fact that we have now introduced an amendment to the effect that the concession on machinery in that regard is being abolished. The hon. member asks that we re-introduce it. We shall take another look at that. I shall not be able to do so immediately, but I am quite prepared to ask, in the light of his representations, that the department take another look at this matter to see whether anything is possible.

I want to thank all hon. members that I have not mentioned by name most sincerely for their participation in the debate. Personally I found the debate very interesting and I appreciate the interest which hon. members showed in it. Perhaps I should just refer to one other matter, concerning something that the hon. member for Yeoville dealt with.

†The hon. member referred to the financial rand and to the possibility of using that rate of exchange for bringing in capital for housing investment. Of course, this impinges on the whole question of exchange control. I have every intention, when we deal with the Third Reading of the Appropriation Bill, of saying something more about exchange control and indeed on this very issue which has been raised by the hon. member. I have already made a note of this and I hope that what I have in mind may be of some interest to him.

Will you deal with it at the beginning of the Third Reading so that we can react to it?

Yes, I shall deal with it in a short introductory speech. There is no doubt about it that this whole issue is very important.

Question agreed to.

Bill read a Second Time.

Committee Stage

Clause 8:

Mr. Chairman, I again want to raise a point which I have raised earlier with the hon. the Minister in regard to clause 8. Clause 8(1)(a) reads as follows—

If the hon. the Minister is right in what he has said, then Parliamentarians, public servants, employees of local authorities and anybody else whose pension fund is established by law, are going to be worse off as a result of this whole set-up. The principle Act reads much the same. There is no limitation on the contribution one is allowed to make to a pension fund which has been established by law. But now, according to what the hon. the Minister has said, there is apparently to be a limitation. However, as I have submitted to him, as far as a pension fund which has been established by law is concerned, there is no limitation, and individual members of this House should still be allowed to use the full R3 500 in order to take out retirement annuities. If that is not so, I appeal to the hon. the Minister to go into it and to introduce the necessary amendment in the Other Place, because it does seem to me to be wrong to introduce that change, which will adversely affect not only members of Parliament, but also anybody who is in the Public Service, anybody who is a member of a pension fund established by law and anybody who is a member of a local authority pension fund.

Mr. Chairman, I should like to give the hon. member for Yeoville and other hon. members the information I have been able to obtain here. The contributions to the Parliamentary Pension Fund are not limited in any way. Here I want to refer to the amended proviso to section 11(k)(i). In this respect the hon. member for Yeoville is correct.

I have already set out the position in regard to the retirement annuity fund contributions. If an MP pays, say, R2 000 into the Parliamentary Pension Fund, he may, in respect of retirement annuity contributions, claim the greater of, firstly, the difference between R3 500 and R2 000, namely R1 500, or, secondly, R1 750, which latter amount is then the greater amount. If he pays only R1 000 into the scheme, he may claim the greater of R3 000 less R1 000, namely R2 500, or R1 750, in which case the figure of R2 500 is the applicable figure.

Section 11(k)(i) refers to pension fund contributions, as the hon. member will know. It is quite true to say that there is no ceiling on such contributions under section 1l(k)(i) when the Fund is one established by law. That is the position in regard to the Parliamentary Pension Fund. What the hon. member for Yeoville was talking about, however, were contributions to a retirement annuity fund. These contributions are allowed under section 11(n). This section does not distinguish between different kinds of pension fund contributions. In effect it merely stipulates that a calculation must be made. It would be calculated as follows: R3 500, minus pension fund contributions allowed, whether the pension fund contributions are made to a Fund established by law or to any other Fund.

Business interrupted in accordance with Standing Order No. 74.

Clause agreed to.

Clause 13:

Mr. Chairman, I move the following amendments—

1. (1) In the English text, on page 26, in line 21, after “utilized” to insert “or such debt was incurred”;
2. (2) in the Afrikaans text, on page 27, in lines 6 and 7, to omit “by die aanwending van”.

I think that by doing this we are bringing the two texts into line with each other.

Amendments agreed to.

Clause, as amended, agreed to.

House Resumed:

Bill reported with amendments.

Bill read a Third Time.

Mr. Speaker, I move—

I should like to explain the Bill very briefly.

According to a legal opinion obtained with which the State law advisers agree, section 1(3) of the Protection of Businesses Act, 1978, only grants protection to businesses which are the producers of matter or material, or businesses acting on behalf of producers. Certain South African businesses have, in their absence, been accused in the United States of America of having been parties to an agreement which sought to increase the price of certain commodities of a strategic nature by collusion with regard to price determination, location, division, limitation of supply, eliminating competition in regard to commodities and boycotts against certain purchasers of specific goods. Some of the businesses found guilty in their absence in the United States of America are not the producers of the accommodities at issue in the court case, nor did they act on behalf of producers.

Consequently it would have been possible to apply for a court order in South Africa to impose the American sentence on the parties or enterprises in South Africa. The imposition of the American sentences in the cases in question is not regarded as being in the interests of South Africa. For this reason it became necessary to amend section 1(3) of the Act to afford the necessary protection to the enterprises in question.

Here we are once again dealing with a measure aimed at protecting South Africa’s interests against the onslaught being made on us from so many quarters. I therefore trust that as in previous cases, when I came to Parliament during the session with other measures of this nature, I will get the support of both sides of the House for the measure.

Mr. Speaker, particularly in view of the fact that there is an amendment on the Order Paper in the name of the hon. the Minister which will have the effect that the proposed subsection (a) will be deleted, there can be no objection from our side to the Second Reading of the Bill. Therefore we shall support it. I shall not go into the question of what our attitude would have been if the hon. the Minister had not placed that amendment on the Order Paper.

Mr. Speaker, I rise just to say that we have no other comments to make in addition to what the hon. the Minister has said in moving the Second Reading. We will support the Bill.

Question agreed to.

Bill read a Second Time.

Committee Stage

Clause 1:

Mr. Chairman, I move the following amendment—

Amendment agreed to.

Clause, as amended, agreed to.

Title:

Mr. Chairman, I move the following amendment—

Amendment agreed to.

Title, as amended, agreed to.

House Resumed:

Bill reported with amendments.

Bill read a Third Time.

I rise merely to thank the hon. the Minister. We suggested this amendment in the first place. We thank the hon. the Minister for having accepted it.

Amendment agreed to.

In accordance with Standing Order No. 22, the House adjourned at 22h30.